MSCI has officially approved new eligibility rules that could remove MicroStrategy and Japan's Metaplanet from its global equity indexes, following a consultation on how to classify companies with limited operating activities. The index provider announced Thursday that it will classify qualifying nonoperating companies as ineligible for inclusion in its Global Investable Market Indexes. The changes will take effect at the close of November 30, with the final list of affected companies expected on November 11. MSCI's initial simulation, using May 2026 data, identified Strategy, Metaplanet, and UK uranium investment company Yellow Cake as potential deletions from the MSCI ACWI Investable Market Index. The decision follows an August consultation that identified Strategy and Japan-based Metaplanet as potential deletions, with Strategy having a free-float-adjusted market capitalization of approximately $23.93 billion compared to Metaplanet's $654 million* in the exercise. The rules affect companies that mostly hold investments rather than running a real business, with MSCI extending its existing exclusion of investment funds to companies that look like them.
MSCI's concern centers on whether companies whose value comes mainly from holding assets such as Bitcoin should be treated like conventional operating businesses. As reported by MSCI, MicroStrategy still sells software but its Bitcoin holdings dominate its balance sheet. The company disputes this distinction, with MicroStrategy stating in its response to MSCI that it believes the proposal is misguided. The company estimates that MSCI-linked funds hold approximately 13 million shares (3.1% of basic shares outstanding), with JPMorgan estimating that passive funds tracking the MSCI index may be forced to sell $2.8 billion worth of MSTR shares. MicroStrategy has opposed the proposed restrictions, arguing that its Bitcoin treasury business should not disqualify it from major equity benchmarks, describing the company as an operating entity with both software and Bitcoin treasury operations. The company maintains that its Bitcoin business qualifies as an operating segment under U.S. accounting principles and questions MSCI's authority to exclude it using the proposed classification. MicroStrategy founder Michael Saylor has described the company as an operating business with a software arm, selling business intelligence software to companies including Coca-Cola and Porsche, and has rejected comparisons with investment funds.
The exclusion extends beyond MicroStrategy and Metaplanet, with MSCI announcing that over $100 billion worth of crypto holdings held by public companies could be affected. According to MSCI, several other crypto treasuries including Sharplink, DeFi Dev Corp, Ton Strategy, Canton Strategic Holdings, Capital B, Sui Group Holdings, Upexi, and Solana Company will be on the watchlist for potential deletion. During the consultation process, Bitcoin treasury firms including Strategy and Strive opposed the proposal, with TD Cowen backing the two firms, arguing that their digital credit operations using Bitcoin holdings as collateral make them operating firms. The proposal was first floated last year but was paused after massive outcry that it only targeted the crypto sector, with the new 2026 proposal slightly expanded beyond just crypto treasuries. MSCI will discontinue interim measures announced in October 2025 for companies with digital asset holdings representing at least 50% of total assets, with these companies now evaluated using the newly adopted non-operating company methodology.
If MicroStrategy is excluded, ETFs tracking affected indexes would generally have to sell MSTR shares when they rebalance, creating selling pressure regardless of Bitcoin's price or investor opinions about the company. MicroStrategy shares fell as much as 4.3% in after hours trading following the announcement before recovering some losses, remaining down 1.5% in extended trading. The potential selling would come from investment funds required to adjust their portfolios to match index composition, rather than from Strategy selling its Bitcoin holdings. However, if other index providers adopt similar rules, broader outflows could reach $8.8 billion. The company's stock actually rose 5.62% on Thursday, closing at $151.29, with the rally occurring before MSCI's announcement after the US market closed. The shares have declined 72% from their record high of $543 in November 2024, with weaker demand for the shares potentially making it harder for these companies to raise money for further Bitcoin purchases. MicroStrategy continues accumulating Bitcoin, with its October 12 disclosure confirming the purchase of 250 BTC for approximately $21.5 million, raising total holdings to 848,250 BTC with reported holdings carrying an aggregate acquisition cost of approximately $64 billion as of October 11.
MSCI will publish its affected-company list on November 11, with the rules taking effect after November 30. Existing index constituents would generally need to fail the tests across two consecutive annual assessments before removal. The exclusion would not delist MicroStrategy from Nasdaq or require the company to sell Bitcoin. The longer-term risk includes weaker demand for MSTR shares, which could make raising money for further Bitcoin purchases more difficult. The dispute comes as Bitcoin treasury companies increasingly rely on equity and debt financing to accumulate digital assets, with exclusion from major indexes potentially reducing demand for their shares. MSCI has added buffers to avoid constant churn in the index - a member is removed only if it fails the screen in each of its two most recent annual filing periods, and a company outside the index is blocked from joining if it fails in either of its two most recent periods. To avoid constant churn in the index, MSCI has added buffers - a member is removed only if it fails the screen in each of its two most recent annual filing periods, and a company outside the index is blocked from joining if it fails in either of its two most recent periods.
