Shares of Strategy (NASDAQ:MSTR) fell approximately 3% on Friday morning as investors reacted to the potential risk of exclusion from major MSCI equity indices. This concern was amplified by warnings from analysts at JPMorgan, who indicated that such a move could lead to significant capital outflows from exchange-traded funds (ETFs) and mutual funds linked to these benchmarks.
MSCI is currently reconsidering the inclusion of companies that hold 50% or more of their assets in digital currencies, which puts Strategy, with its substantial bitcoin investments, at risk. If MSCI and other index providers decide to proceed with these changes, Strategy could face an outflow ranging from $2.8 billion to $8.8 billion.
As it stands, Strategy is included in several prominent indices, including the Nasdaq 100, MSCI USA, and MSCI World. Despite the fact that active fund managers are not strictly bound to adjust their portfolios based on index changes, analysts highlight that exclusion from such key indices could foster negative sentiment in the market. This shift in sentiment may complicate the company’s ability to secure capital through equity or debt offerings in the future.
