Concerns are rising about a potential MSCI index removal as Strategy begins formal negotiations with the global index provider. Michael Saylor has confirmed that the discussions are underway, ahead of MSCI’s scheduled review on January 15. The firm is seeking to address its classification and the risks tied to its heavy exposure to digital assets.
According to Reuters, Strategy is holding official talks that could ultimately lead to its removal from major global indices. Saylor noted that the company is “actively engaging” with MSCI as the decision approaches. Analysts warn that such a move could trigger as much as $8.8 billion in outflows if other index providers follow MSCI’s lead. Saylor, however, challenged these estimates and argued that current market conditions do not support the larger projections.
He acknowledged the recent decline in Bitcoin from its record high above $120,000, a drop that put pressure on equity markets and digital assets. Saylor reiterated that Strategy’s stock is intentionally designed to move more sharply than Bitcoin because the company functions as a leveraged play on the cryptocurrency. A recent report from JP Morgan noted that a break of critical stock support levels could make it harder for the firm to raise capital during periods of high volatility.
The scrutiny intensified after MSCI and Nasdaq announced a review of companies with more than half of their assets tied to digital tokens. At the time, Saylor dismissed concerns, emphasizing that index classification does not define the company’s long-term mission.
To stabilize sentiment, Strategy introduced a $1.44 billion reserve designed to support dividend payments on preferred shares and to cover interest on outstanding debt. This step followed CEO Phong Le’s warning that the company might need to sell Bitcoin if its modified net asset value dropped below one.
The move came after steep losses in leveraged ETFs linked to the firm. Two of its 2x long funds are down nearly 85% this year, while inverse products also fell sharply alongside Bitcoin’s slide below $90,000. Strategy’s stock price has dropped almost 40% year-to-date. As a result, the company revised its full-year guidance from an expected $24 billion profit to a range between a $6.3 billion gain and a $5.5 billion loss.
Critics like Peter Schiff argue that the company is nearing a breaking point. He pointed to Strategy’s recent stock sales aimed at strengthening liquidity as further evidence of what he calls a flawed business model.
