Strategy (NASDAQ: MSTR) closed down 9.56% at $136.83 on Friday, October 16, the first trading session after MSCI announced it would make non-operating companies ineligible for its Global Investable Market Indexes.
The broader market added pressure to the decline, with the Nasdaq Composite losing 2.14% during a wider tech selloff, and MSTR carries a five-year beta of 3.55, amplifying those moves sharply.
Bitcoin, the core asset underpinning Strategy’s business model, traded near $82,000 on Friday morning, approximately 2% above the prior day’s level, offering little cushion for the stock.
MSCI screens companies first for substantial operating assets, and those that fail are ineligible if flagged on four or more of five specific financial ratios, with current index members removed only after failing across their two most recent annual filing periods.
The final index list is due November 11, with changes taking effect at the November 30 close, and a simulation from MSCI’s August consultation flagged Strategy, Metaplanet, and Yellow Cake as candidates for deletion.
Strategy has pushed back on the characterization, arguing that it reports its Bitcoin business as an operating segment under U.S. GAAP, meaning the rule’s application to the company is not yet confirmed.
The direct forced selling from any exclusion appears limited, with Strategy estimating that MSCI-linked funds hold roughly 13 million shares, worth approximately $1.8 billion at Friday’s close, less than one full day of trading volume.
The wider danger lies in contagion, as JPMorgan estimated in November 2025 that up to $8.8 billion of outflows could follow if other index providers moved in step with MSCI’s approach.
CEO Phong Le addressed the situation at an August 18 investor Q&A, calling any potential exclusion “really immaterial to us,” though he also acknowledged that issuing stock above 1x net asset value adds Bitcoin per share, with Strategy’s multiple sitting near 1.07x in August.
Strategy purchased just 250 Bitcoin for $21.5 million in the week ending October 11, a sharp reduction from approximately 89,599 Bitcoin acquired in the first quarter of 2026, with Executive Chairman Michael Saylor stating that “we will tend to buy less Bitcoin in a weak Bitcoin market than in a strong market.”
Strategy also spent $192.4 million during that same week repurchasing STRC preferred stock at an average price of around $99.58, within the $99 to $100 target range Saylor had outlined in August.
Saylor noted that if MSTR traded at “a very, very deep discount to NAV, then probably you would see us do something like that,” referring to the $1.0 billion in common stock buyback authority that remained unused as of the October 12 filing.
Wall Street analysts have not pulled back their optimism, with the Street mean price target rising from $229.87 on September 30 to $239.27 by October 16, roughly 75% above Friday’s closing price.
Cantor Fitzgerald maintained its Overweight rating on the stock and raised its price target to $208 from $186 on October 16, even as that figure sits below the broader Street consensus mean.
Shareholders are scheduled to vote on October 28 regarding daily dividends for STRC and Strategy’s other preferred instruments, with third-quarter earnings following after the market close on October 29.
Strategy has already disclosed an estimated $20.91 billion third-quarter gain on digital assets, meaning the earnings report’s real significance will lie in whether the company’s NAV premium holds above the critical 1x threshold heading into MSCI’s November 11 announcement.
