Saylor Confirms Talks with MSCI as Index Exclusion Deadline Nears

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Michael Saylor, the chairman of the corporate Bitcoin giant Strategy, confirmed his company is in discussions with index provider MSCI.

The talks come ahead of a January 15 deadline, by which MSCI will decide whether to remove firms whose primary business is buying cryptocurrencies from its indices, citing concerns they resemble ineligible investment funds.

Strategy’s share price has declined more than 37% this year, significantly underperforming Bitcoin’s minor decline.

This suggests the company’s strategy of selling stock and taking on debt to amass more Bitcoin may be losing favor with investors. A JPMorgan estimate warns an MSCI exclusion could trigger up to $8.8 billion in outflows from Strategy’s stock if other index providers follow suit.

Strategy is currently included in major MSCI indices for the US and global markets. This inclusion attracts significant investment from passive funds like ETFs, which boosts demand and supports the company’s valuation. Saylor has publicly downplayed the potential impact of an exclusion.

In a research note last month, JPMorgan analysts stated that an exclusion from key indices would raise serious questions about Strategy’s future cost of capital and its ability to raise new equity or debt. The bank highlighted the potential long-term financial repercussions for the company’s business model.