Strategy remains in Nasdaq-100... MSCI risk persists

Strategy (MSTR) remains included in the Nasdaq-100 index.

On the 12th (local time), Nasdaq said in the results of its annual index reconstitution that it has kept Strategy as a Nasdaq-100 constituent. The Nasdaq-100 is composed of large non-financial companies listed on Nasdaq, excluding financial firms, and is a leading tech-stock index tracked by more than $400 billion in assets, including the Invesco QQQ Trust (QQQ).

However, moves by other index providers remain a variable. MSCI is reviewing whether to exclude companies that buy Bitcoin (BTC) or other virtual assets (cryptocurrencies) and make them their primary business from its indices. In a report, J.P. Morgan analyzed that "if MSCI excludes Strategy, other index providers may make similar decisions."

Strategy is responding proactively. On the 10th, Strategy chairman Michael Saylor and CEO Phong Le sent a letter to MSCI's Equity Index Committee, stressing that "Strategy is not simply a company that holds Bitcoin, but an operating company that sells digital credit products."

They argued that "Strategy has a structure in which it issues 'digital credit products,' such as preferred shares with fixed and variable rates, and uses the funds raised to purchase Bitcoin," and that "the model, which exploits the spread between capital-raising costs and the return on underlying assets, is similar to that of banks or insurers."