By Why Is Strategy Challenging MSCI’s New Index Test?
Strategy has formally opposed MSCI’s latest proposal for screening companies with large holdings of assets that the index provider considers non-operating, arguing that the methodology is a disguised attempt to exclude digital asset treasury companies from major equity indices.
In a letter signed by Executive Chairman Michael Saylor and CEO Phong Le, Strategy called the proposal “discriminatory, arbitrary, and misguided” and asked MSCI to withdraw it. The company said the rule would have little effect on its underlying business but could damage MSCI’s reputation as a neutral index provider.
Under the consultation launched in August, companies that fail an initial test for having substantial operating assets would face five additional financial-ratio screens. A company flagged on at least four of the five could become ineligible for the MSCI Global Investable Market Indexes. Existing constituents would also face buffers intended to prevent removal after a single failed review.
The proposal follows MSCI’s earlier examination of digital asset treasury companies. MSCI decided in January not to proceed with a plan that could have removed companies based largely on digital asset holdings, but said it would reconsider how businesses with investment-like characteristics should be treated.
Is Bitcoin An Operating Asset For Strategy?
The dispute centers partly on how MSCI distinguishes operating from non-operating assets. Strategy argued that neither U.S. GAAP nor IFRS provides the definition being used in the proposed index methodology.
That distinction matters because Bitcoin now dominates Strategy’s balance sheet and is central to its corporate strategy. The company treats its Bitcoin treasury as an operating segment and records Bitcoin-related gains and losses within operating expenses, a reporting approach it adopted after discussions with the Securities and Exchange Commission.
Strategy also argued that the proposed screen could treat digital asset treasury companies differently from other asset-heavy businesses, including real estate investment trusts, timber companies and energy infrastructure firms.
A simulation of the methodology earlier this year identified Strategy, Japan-listed Metaplanet and uranium investor Yellow Cake as companies that could face deletion, while Ethereum treasury company SharpLink was placed on a watchlist.
Investor Takeaway
The MSCI dispute matters beyond accounting definitions. Removal from widely tracked indices could reduce passive and benchmark-linked demand for digital asset treasury stocks, even if it has little direct effect on their ability to buy Bitcoin or raise capital.
What Happens If MSCI Goes Ahead?
Strategy has asked MSCI to base any final methodology on recognized accounting or legal standards and apply it only to financial filings issued after the rule is finalized. It also wants the index provider to publish a clear explanation for distinguishing operating from non-operating activities.
MSCI is accepting feedback until Sept. 30 and expects to announce the consultation result by Oct. 16. Any new methodology is proposed for the November 2026 Index Review, making the next several weeks important for Strategy and other treasury companies that could fall within the screen.
Index eligibility has become another layer of risk for the digital asset treasury model. Strategy can continue accumulating Bitcoin regardless of MSCI membership, but index exclusion could affect the investor base for its common shares at a time when the company relies heavily on equity markets to finance its capital strategy.
That reliance was visible again last week. Strategy sold common stock and used $369.7 million of the proceeds to buy 4,603 Bitcoin at an average price of $80,318. The purchase lifted its holdings to 845,050 BTC, acquired for a total cost of about $63.73 billion.
Why Is Strategy Spending Heavily On STRC?
Strategy is simultaneously using capital to support its Stretch perpetual preferred stock, STRC. The company has spent $635.2 million repurchasing STRC, including $151.8 million last week at an average price of $97.48 per share.
Despite those purchases, STRC continues to trade below its $100 par value. Strategy has authorized up to $1 billion of repurchases and has maintained STRC’s annual dividend rate at 12% as it tries to keep the security trading closer to par.
Competition from Strive may be making that task harder. Strive’s SATA perpetual preferred stock offers a 13% annualized dividend with payments made each business day, compared with STRC’s 12% rate paid semi-monthly. SATA has remained near $100, allowing Strive to issue more shares through its at-the-market program and use the proceeds to expand its own Bitcoin treasury.
Strive added 1,800 BTC over the latest week, while its common shares have gained about 60% this year. Strategy shares, by comparison, are down roughly 15% year to date despite rising 4.42% on Monday to $132.94.
The combination leaves Strategy balancing three demands on investor capital: continued Bitcoin accumulation, support for its preferred securities and a fight to preserve index eligibility. None prevents the company from pursuing its Bitcoin strategy, but together they make the cost and availability of capital increasingly important to how aggressively that strategy can continue.