MSCI to Drop Strategy and Metaplanet From Indexes Nov. 30

MSCI confirms six deletions under the new screen

MSCI’s final impact list names six deletions tied to the new rule. Agronomics, a London-listed investment company, joined Strategy, Metaplanet, Upexi, Yellow Cake and Iceland’s Skel on the final list. MSCI’s October preliminary list had named five.

Another 19 securities went on the watchlist, including Ether treasury company Sharplink and French Bitcoin holder Capital B. MSCI identified them separately from the securities it will delete under the new screen.

When MSCI adopted the eligibility rules in October, the preliminary list indicated which companies could be removed. Wednesday’s final list settled those decisions and confirmed the impact across large-cap, small-cap and micro-cap indexes.

Under the methodology MSCI outlined Wednesday, companies without substantial operating assets face five financial ratio tests. Four failed tests trigger ineligibility. Current constituents face removal only if they fail the screen in both of the two most recent annual filing periods, and MSCI can also consider a recent interim filing.

The broader November review also moved some stocks between size categories. IREN, a Bitcoin miner, appears among the U.S. deletions in the standard index list and among the U.S. additions in the small-cap list. Strategy and Metaplanet are marked for deletion on the separate list of companies affected by the eligibility screen.

Strategy put MSCI fund exposure at 13 million MSTR shares

In its response during the consultation, Strategy estimated that funds linked to MSCI’s Global Investable Market Indexes held about 13 million of its shares, or 3.1% of its basic shares outstanding. The company put that figure at about 60% of its average daily trading volume over the 30 days it used for comparison.

The estimate gives investors a measure of the exposure before the rebalance. Funds that replicate the affected benchmarks will need to bring their portfolios into line with the new index weights. How many shares they trade on November 30 will depend on what they still hold and when managers make their adjustments.

MSCI builds its broad regional and global benchmarks from country indexes. A change to the MSCI USA Index therefore also flows through to broader standard indexes that include it.

Strategy had urged MSCI to withdraw the proposal, arguing that it treats its Bitcoin business as an operating segment under U.S. accounting rules. MSCI uses its own eligibility criteria for the indexes. Its November notice did not disclose how individual funds plan to trade.

Strategy and Metaplanet retain their Bitcoin treasuries

Strategy reported 850,364 Bitcoin as of November 8, acquired for $64.16 billion including fees and expenses. Metaplanet’s treasury tracker showed 44,000 Bitcoin, a level it reached on September 30.

The rebalance applies to company shares held by funds. Strategy remains listed on Nasdaq and Metaplanet on the Tokyo Stock Exchange. Any sale of Bitcoin from their treasuries would be a separate corporate decision.

Share demand still matters to treasury financing. Strategy has used common stock sales to fund Bitcoin purchases and preferred stock buybacks. After it disclosed its third-quarter results, its November 9 filing showed it had raised $283.8 million in net proceeds from selling common shares over the preceding week.

The Crypto Fear & Greed Index registered 28 on November 12, in the Fear range, down from 29 a day earlier.

The November 30 close is the next checkpoint. Trading volume will show how active the shares were around the rebalance, while later fund disclosures can show how much exposure individual portfolios removed.