MicroStrategy Could Face Billions in Outflows Amid Potential MSCI Index Removal
MicroStrategy (MSTR), the largest publicly traded holder of bitcoin, is in discussions with index provider MSCI over a possible removal from major equity benchmarks—a decision that could have significant financial consequences.
Reuters reports that MSCI is expected to make a decision by Jan. 15. JPMorgan analysts estimate that if MSCI removes MicroStrategy and other index providers follow, the company could face outflows of up to $8.8 billion. MicroStrategy’s inclusion in indices like MSCI USA and MSCI World means it is widely held by passive investment funds.
CEO Michael Saylor told Reuters, “We’re engaging in that process,” adding he was unsure about the accuracy of JPMorgan’s estimates.
The company, which holds 650,000 BTC, has been under scrutiny after bitcoin fell from above $120,000 to $82,000. Although prices have recovered to around $93,000—26% below the record—critics question the sustainability of MicroStrategy’s debt and equity strategy to acquire BTC. Shares have dropped 37% year-to-date.
