Strategy Pushes Back Against MSCI Index Exclusion Proposal, Calls Rules ‘Discriminatory’

• The proposal would assess companies using operating assets and five financial ratios.
• Strategy stated that MSCI has not clearly defined what constitutes an operating company.
• It also pointed out that its methodology does not align with established accounting frameworks.

Shares of Michael Saylor-backed Strategy (MSTR) fell in midday trading on Friday, reversing Thursday’s gains, after MSCI announced it would adopt a new approach to screening companies for its global benchmark indexes that could put the Bitcoin (BTC) treasury firm’s index membership at risk.

Strategy on Friday responded to the change in rules, urging MSCI to withdraw the proposal. It said that the new methodology repackages an earlier, abandoned effort to exclude companies whose digital-asset holdings account for at least 50% of their total assets.

“The proposal, like the 2025 proposal that MSCI withdrew, is discriminatory, arbitrary, and misguided,” Strategy wrote in a letter to MSCI’s Equity Index Committee. The company said the changes would have little effect on its business but could damage MSCI’s reputation as a neutral index provider.

MSTR stock fell over 6% in midday trade. On Stocktwits, retail sentiment around the firm has been trending in ‘bearish’ territory for almost three months. 

Strategy Challenges MSCI’s Definition Of An ‘Operating Company’

MSCI’s revised methodology would screen companies using measures of operating assets and five financial ratios, rather than relying on the previous proposal’s digital-asset ownership threshold. The updated framework is scheduled to take effect with the November index review.

According to Strategy’s letter, MSCI’s proposed distinction between operating and non-operating assets relies on undefined terms that are not established under generally accepted accounting principles or International Financial Reporting Standards.

It added that the proposed screen would disproportionately affect digital-asset treasury companies, despite being presented as a broader, industry-neutral policy. 

Strategy currently has 848,250 Bitcoin on its balance sheet, worth around $69 billion at Bitcoin’s current price of over $81,300. BTC fell around 1.25% in the last 24 hours. Retail sentiment around the apex cryptocurrency trended in ‘bearish’ territory over the past day. 

What Does Strategy Want?

The company asked MSCI to withdraw the proposal or revise it with clear definitions, objective criteria and prospective implementation. It also called for the index provider to publish its consultation record and explain the rationale behind its proposed thresholds.

MSCI is expected to publish a list of potentially affected companies on Nov. 11.

In a note to investors cited by TheFly, Cantor Fitzgerald raised its price target on MSTR stock to $208 from $186 and reiterated an ‘Overweight’ rating. 

The firm said fintech and digital-asset companies had largely calibrated third-quarter (Q3) expectations well, while resilient consumer spending had provided a supportive backdrop despite macroeconomic uncertainty.

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