TLDR
- Strategy (MSTR) could be removed from MSCI indices by Jan 15, triggering potential outflows of $8.8 billion from passive funds
- The company may sell bitcoin for the first time ever if its market cap falls below its crypto holdings value
- Strategy’s mNAV metric sits at 1.01, just one percentage point above the level that would force bitcoin sales
- Shares have fallen 37% this year while bitcoin dropped from $120,000 to $93,000
- The company holds 650,000 BTC worth $59 billion and lowered its year-end bitcoin price target to $85,000-$110,000
Strategy faces a double threat that could reshape its future. MSCI is considering removing the company from major equity benchmarks.
MicroStrategy Incorporated, MSTR
A decision arrives by January 15. The timing couldn’t be worse for shareholders.
JPMorgan analysts project the move could trigger $8.8 billion in outflows. That happens if other index providers follow MSCI’s lead.
Strategy sits in indices like MSCI USA and MSCI World. Passive funds tracking these benchmarks would be forced to sell.
Michael Saylor confirmed the company is “engaging in that process” with MSCI. He cast doubt on JPMorgan’s outflow estimates but acknowledged the discussions.
The stock has dropped 37% this year. Bitcoin’s volatility shares the blame.
Historic Bitcoin Sale Now on the Table
CEO Phong Le made waves last week. He revealed Strategy would sell bitcoin under certain conditions.
This breaks a five-year streak. The company hasn’t sold a single coin since launching its bitcoin treasury in August 2020.
Le outlined two scenarios that could force sales. The most immediate concerns the company’s market capitalization.
“My hope is our mNAV doesn’t go below one, but if we did and we didn’t have access to other capital, we would sell bitcoin,” Le said. “There’s the mathematical side of me that says that would be the absolutely right thing to do.”
The mNAV metric compares market value to bitcoin holdings on a fully diluted basis. Artemis data shows it currently at 1.01.
Strategy’s market cap has crashed 60% from its July peak. It now barely exceeds the value of its bitcoin holdings.
Saylor addressed the controversy Monday. “We will make rational decisions that are in the best interest of the equity shareholders,” he told investors.
He pushed back on critics who see selling as betrayal. The decision would be financial, not ideological.
Price Targets Drop as Reality Sets In
Bitcoin soared above $120,000 before plunging to $82,000. The cryptocurrency has recovered to around $93,000 but remains 26% off its high.
Critics question whether Strategy’s debt and equity issuance model can survive. The company keeps buying despite market pressure.
Strategy purchased 130 more bitcoin Monday. Total holdings now stand at 650,000 BTC worth roughly $59 billion at current prices.
The company set aside $1.44 billion for preferred dividends and debt interest. Management is balancing growth with obligations.
Strategy updated its 2025 earnings guidance. Bitcoin is now projected to end the year between $85,000 and $110,000.
That’s down from the previous $150,000 target. The revision reflects changing market dynamics.
The January 15 MSCI decision looms large. Strategy’s mNAV remains at 1.01, leaving no margin for error as the company holds the largest public bitcoin stockpile while facing potential forced selling for the first time in its history.
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