Key facts
- Strategy is opposing an MSCI proposal that could lead to its removal from global indexes.
- The proposal targets companies based on financial ratios, with Strategy and two other firms identified for potential deletion.
- Strategy argues the rule is discriminatory and unfairly targets companies holding digital assets.
- Michael Saylor and CEO Phong Le have formally requested MSCI withdraw the proposal.
- MSCI's consultation on the rule closes September 30.
Strategy, a company that holds Bitcoin on its balance sheet, is urging index provider MSCI to withdraw a proposed eligibility screen that could lead to its removal from MSCI's global benchmarks. In a letter signed by founder Michael Saylor and CEO Phong Le, Strategy argues the proposal is "discriminatory, arbitrary, and misguided," and serves as a pretext to target digital asset treasuries. The proposed rule, which MSCI is consulting on, flags companies based on five financial ratios, with four failures making them ineligible for inclusion in indexes like the Global Investable Market Indexes (GIMI).
MSCI's consultation identifies Strategy, UK uranium holder Yellow Cake, and Japan's Metaplanet as companies potentially facing deletion. Strategy accounts for a significant portion of the market capitalization at stake among the flagged companies. Strategy contends that its Bitcoin treasury operations should not trigger the 'non-operating company' classification and that the proposal conflicts with established securities laws and accounting principles. The company also suggests that while the impact on its business may be minimal, the proposal could "profoundly" harm MSCI's reputation as a neutral index provider.
This is not the first time Strategy has appealed to MSCI regarding such proposals; executives made a similar appeal in December, warning that excluding crypto treasuries could harm U.S. national security. MSCI's feedback period for the current proposal closes on September 30, with results expected by October 16 and any changes potentially taking effect in the November index review. JPMorgan analysts previously estimated that exclusion from MSCI indexes could lead to billions in outflows for affected companies.