Michael Saylor, co-founder and Executive Chairman of Strategy, publicly addressed the recent concerns regarding the potential exclusion of the company from various stock indices next year. In a statement made on X, he emphasized that Strategy should not be viewed merely as an investment fund, especially in light of a report from JPMorgan that suggested certain crypto-buying firms might be removed from products offered by index provider MSCI. This report raises questions for companies whose digital asset holdings make up a significant portion of their total assets.
Saylor clarified Strategy’s business model, stating, “Strategy is not a fund, not a trust, and not a holding company. We’re a publicly traded operating company with a $500 million software business and a unique treasury strategy that uses Bitcoin as productive capital.” Despite the stock facing a significant downturn of 42% in the past month, falling to around $175, Saylor expressed confidence in the firm’s direction.
The troubling decline in Strategy’s shares coincides with a broader decrease in Bitcoin’s value. The company’s market capitalization has reportedly fallen beneath that of its Bitcoin holdings, complicating its funding endeavors. On October 10, MSCI announced that it is considering how to categorize crypto treasury firms, particularly those where capital-raising primarily finances digital asset accumulation. The firm is expected to finalize its decision on January 15.
Historically, Strategy has funded its Bitcoin purchases by issuing common shares, but as this method has become less viable, it has started issuing preferred shares that offer dividends. During his remarks, Saylor showcased the various products introduced by Strategy in the current year, positioning the company as a “Bitcoin-backed structured finance company” that aims to innovate in capital markets as well as software.
Saylor reaffirmed his commitment to Bitcoin, stating that “index classification doesn’t define” the world’s largest corporate holder of Bitcoin. As of the latest figures, Strategy’s Bitcoin holdings were valued at approximately $55 billion, a stark contrast to its peak valuation of nearly $80 billion in early October.
In late 2022, Strategy was included in the tech-focused Nasdaq-100, an addition that analysts estimated could lead to a whopping $2.1 billion in net buying of its shares. Although the firm qualified for inclusion in the S&P 500 in September, it ultimately did not make the cut, with Robinhood and Coinbase being included instead.
In an ongoing survey within the Myriad prediction market, only 6% of respondents believe that Strategy will sell any Bitcoin this year, indicating strong confidence among some investors regarding the company’s strategy and future direction.
