MSCI confirms Strategy’s removal from indexes at end of November

MSCI has announced that three crypto treasury firms – Strategy, Metaplanet and Upexi – will be removed from its global equity indexes following the close of trading on November 30. The decision comes after months of debate over whether these firms meet the criteria to be classified as operating businesses. MSCI's final list of affected securities, disclosed as part of its November index review, indicates that "STRATEGY A" will be deleted.

Japan's Metaplanet and crypto treasury company Upexi are also slated for removal, with Ether treasury firm Sharplink on a watchlist. After the removal, Strategy's shares experienced a 1.65% drop in after-hours trading on Wednesday. The changes will come into effect after the market closes on the specified date, as per MSCI's implementation schedule announced in October.

The exclusion could lead to funds tracking the impacted benchmarks selling the companies' shares, thereby reducing a source of passive investment demand. According to a JPMorgan estimate, Strategy's exclusion could result in approximately $2.8 billion in selling. Despite opposing the proposal, Strategy pointed out that it had repackaged MSCI's earlier efforts to exclude digital asset treasury companies, thereby injecting policy judgments into index construction.

The company downplayed the potential disruption, stating that MSCI-linked funds held around 13 million shares, representing 3.1% of its basic shares outstanding and less than one day's trading volume.