The next index qualification test for Strategy will come on November 11th. On that day, MSCI will announce the results of the constituent stock adjustments, which may lead to the company being removed from its global stock benchmark index.

The company has raised objections to the relevant qualification rules and stated that even if it is excluded, the impact will be limited. The company estimates that the related index funds hold a total of approximately 13 million shares of MSTR, which is equivalent to 3.1% of its basic outstanding shares.

The impact of this decision extends beyond whether these funds will continue to hold that stock. Strategy often finances the purchase of Bitcoin by selling new shares, and its documents from October indicate that this connection persists even when the company uses cash to repurchase preferred stocks at the same time.

From October 12 to October 18, the company raised approximately $22 million by selling common shares and spent $22.1 million on purchasing Bitcoin. In the following week, the company reported that it neither issued shares at market price nor purchased any more Bitcoin.

Being removed from a stock index does not mean that Strategy must sell its Bitcoin. However, this could cause buyers linked to the benchmark index to withdraw, and it is precisely this stock that the company uses to raise new funds, which adds another factor to be considered in future fundraising decisions.

MSCI has adopted this method and has specifically identified Strategy in the list of potentially affected parties. The final announcement regarding the constituent stocks will be released on November 11th, and the changes will take effect after the market closes on November 30th.

Strategy refers to its Bitcoin business as an operational business.

Strategy has urged MSCI to withdraw that framework, on the grounds that the index provider has merely rephrased its previous proposal targeting digital asset treasury companies. The previous method focused on enterprises where digital assets accounted for at least 50% of total assets.

In a public response, Strategy stated that the revised terminology only affects the same type of enterprises through another set of rules. The company claimed that the so-called classification between operational and non-operational activities has no basis in Generally Accepted Accounting Principles (GAAP) in the United States, International Financial Reporting Standards (IFRS), or any recognized legal framework.

The company stated that it classifies its Bitcoin business as a operating segment in accordance with U.S. Generally Accepted Accounting Principles (GAAP), which is consistent with its communication with staff from the U.S. Securities and Exchange Commission (SEC). The company believes that MSCI is incorporating its own policy judgments into the index compilation.

The opposition from Strategy is not limited to the possibility of their own exclusion. The company claims that this framework undermines the neutrality and reliability that investors expect from a wide range of stock index providers.

The statement from MSCI is that more corporate issuers with characteristics similar to investment tools should be assessed to determine whether they qualify for inclusion. Investment funds, business development companies, and other passive investment vehicles are already excluded from their stock investment scope.

The new method evaluates companies based on their assets and financial characteristics, and it is not the case that a company is removed simply because it holds Bitcoin.

As previously reported by crypto.news, these adopted index qualification rules originated from a public consultation that began on August 3rd. The feedback period ended on September 30th, and MSCI announced its decision before the deadline of October 16th that it had set.

In the public opposition to this proposal, Strategy also included a request for supporters to contact MSCI. Their response page still outlines the company's reasons for opposition, as well as their estimates of the number of shares held in index-linked funds.

MSCI has not yet announced, while the accounting department of Strategy has determined that this may exempt them from the new screening rules. The company's eligibility will be determined by the methods applied in the index review.

MSCI requires companies to pass operational and financial tests

According to the final methodology of October, if a company's operating assets account for at least 50% of its total assets, it can pass the preliminary screening. Companies that fall below this threshold will need to undergo five additional financial tests.

These tests cover operational asset strength, expense intensity, operating cash flow, fair value strength, and dependence on external financing. The issuer must fail to meet the criteria in at least four of these tests in order to satisfy the exclusion conditions.

The existing constituent stocks and the companies applying for inclusion are subject to different thresholds. Taking the intensity of operating assets as an example, the relevant threshold for existing constituent stocks is at least 10%, while for non-constituent stocks, it is at least 20%.

Both types of companies are subject to a minimum cost intensity threshold of at least 5%, as well as the requirement that their operating cash flows must be positive. Fair value assessment also includes alternative criteria based on assets and sales-related indicators.

For existing constituent stocks, the fair value threshold related to sales is 75%, while for non-constituent stocks it is 50%. The thresholds for financing as a percentage of assets are 30% and 20%, respectively. There is also an alternative condition regarding whether the capital raised provides funds for asset accumulation.

According to the MSCI requirement, existing constituent stocks must not pass the relevant screening during both of the most recent annual reporting periods in order to be deleted. Potential new entrants, on the other hand, may lose their qualification if they do not pass the screening during either of these periods.

The first four financial tests are assessed separately for each period. Capital dependency, on the other hand, is evaluated on a consolidated basis across periods. MSCI may also take into account the most recent interim information when appropriate.

The method stipulates that the reviews will be conducted in conjunction with the index reviews in February, May, August, and November. For the November review, financial reporting documents published by the last working day of September are typically taken into consideration.

This release deadline is earlier than Strategy's financial report release on October 29th. The method of MSCI allows for the consideration of interim information, but the institution has not yet announced the company-level details regarding which final input data will be used in the review for Strategy in November.

These rules will replace the temporary restrictions implemented in October 2025 for companies whose digital assets accounted for at least 50% of their total assets. Those restrictions once limited the number of index stocks and the addition of factors, and delayed some new additions and adjustments to scale categories.

The list of potential affected parties includes five companies, among which is Strategy.

The list of potential impacts for MSCI identifies five securities that may be deleted, including Strategy, Metaplanet, Yellow Cake, Iceland's Skel Fjarfestingafelag, and Upexi.

This document uses financial information as of September 30, as well as market capitalization data as of October 9, and labels these changes as potential alterations to be reviewed in November.

In this snapshot, Strategy is listed as a constituent of the large-cap stocks, with a market value of approximately $43.32 billion, and a market value after free-float adjustment of about $40.29 billion. Metaplanet is listed as a constituent of the small-cap stocks, with a market value of about $803.9 million after free-float adjustment.

After the free circulation adjustment, the market value of Yellow Cake is approximately $1.8 billion. The corresponding values for the other two potential delisted companies, Skel and Upexi, are about $102.9 million and $45.3 million respectively.

The total market value of these five companies after adjusting for free float is approximately $43.05 billion, of which Strategy accounts for about 93.6%. This calculation uses the data from the MSCI time point and does not estimate the number of shares held by index funds.

This document also includes 17 securities on a potential observation list. SharpLink appears alongside companies such as Urbana, Stack Capital Group, Sui Group Holdings, Ton Strategy, and DeFi Development Corp.

The latest list is more extensive than the earlier drills released during the consultation period. That simulation, based on data from May, had listed Strategy, Metaplanet, and Yellow Cake as potential targets for deletion, and included three companies in the observation list.

An earlier deletion proposal described the two-period requirement for existing constituent stocks. Only companies that meet the screening criteria in the latest round may first be placed on an observation list, to be then processed in subsequent reviews.

MSCI has set the release date for the final list as November 11th. The potential impact documents cannot replace this announcement, and moreover, the market value on October 9th mentioned in them is not the current real-time quotes for these companies.

Strategy claims to have approximately 13 million shares in index-linked positions.

Strategy believes that being removed will not have a substantial impact on its business, as the scale of positions linked to relevant indices is limited relative to its share capital base and trading activity. In its response, the company stated that this portion of holdings amounts to approximately 13 million shares MSTR.

The company stated that this represents 3.1% of its outstanding shares, which is approximately 60% of its average daily trading volume over the past 30 days. The company also compared this position with the trading volume of about two trading days during the rebalancing on May MSCI World of 2026, when the company was removed from the portfolio.

These numbers constitute a part of Strategy's opposition to this rule. The public announcement by MSCI did not separately estimate how many Strategy shares the fund would sell.

Index funds operate based on an authorization linked to their benchmark, while the timing and method of portfolio adjustments depend on the specific product. Some funds hold all the constituent stocks, while others use representative sampling or other tools to track the index.

The simplified prospectus of iShares MSCI ACWI ETF describes a representative sampling method. The fund attempts to track its benchmark by using a portfolio that is similar to the benchmark in terms of overall investment characteristics.

The U.S. Securities and Exchange Commission's guidelines for investors mention that index funds include both full replication strategies and sampling strategies. These guidelines list transaction costs and tracking errors as factors that may lead to differences between a fund's returns and those of its benchmark.

The estimate of Strategy for 13 million shares is attributed by the company to the position size of related tracking products. This is not a public commitment by all of these funds to execute the same number of sell orders at the same price and in the same transaction.

The final constituent stock announcement will be released nearly three weeks ahead of the implementation date. MSCI It has been clarified that the close on November 30th will be the effective time point for this review and change.

Strategy has not yet published estimates for its future stock price under both scenarios. The company's argument is that the disclosed positions are relatively small in comparison to the level of trading activity, so even if they are excluded, the business should still be able to cope.

Recently, Bitcoin purchases have relied on the addition of ordinary shares.

Strategy Recent documents show that while investing a larger amount to repurchase its STRC preferred stocks, the company is still purchasing Bitcoin. From October 5th to October 11th, the company acquired 250 BTC for approximately 21.5 million US dollars and spent 192.4 million US dollars to repurchase STRC.

The company stated that $21 million of this Bitcoin purchase was funded by the net proceeds from the sale of MSTR shares, with an additional $500,000 coming from existing US dollar cash.

These Bitcoin transactions and those involving STRC increased his Bitcoin holdings to 848,250 BTC. Up to that point, the company's cumulative purchase cost was approximately 64 billion US dollars, including fees and expenses.

In the coming week, Strategy will once again purchase 267 units of BTC for $22.1 million, increasing its holdings to 848,517 units of BTC. A company document dated October 19th shows that it sold 140,872 common shares, generating a net profit of approximately $22 million.

During this period, the company also utilized $193.1 million in cash to repurchase STRC, and reported that it paid $45.5 million in preferred stock dividends from designated reserves.

From October 19th to October 25th, Strategy did not buy or sell Bitcoin, nor did it sell shares through its market-price issuance plan. Instead, the company used $204.9 million in cash to repurchase 2,068,459 shares of STRC.

Disclosures on October 26 showed that its Bitcoin holdings remained unchanged at 848,517 BTC, with the purchase cost stated in the report being 64.02 billion US dollars. The company also indicated that no MSTR or other series of listed preferred stocks were repurchased during that week.

As the repurchase continues, the independent cash category of Strategy has also changed. Its US dollar cash balance has decreased from $447.3 million a week ago to $242.4 million, while the designated US dollar reserves are $4.83 billion.

The company stated that this reserve is intended to support preferred stock dividends and debt interest payments. The US dollar cash can be used to purchase Bitcoin, contribute to reserves, and for other capital management activities.

The CEO, Phong Le, previously stated that Strategy intends to buy when the price of STRC is below its $100 par value, with the actual purchase depending on market prices and liquidity. Management said that the discounted repurchase is a way to reduce future preferred stock dividend obligations.

The company already has a established policy of selling Bitcoin.

Strategy In June, the board of directors approved a Bitcoin liquidation plan as part of a broader capital framework. This policy allows the company to sell Bitcoin for specific purposes such as reserves, dividends, interest payments, and share repurchases.

This capital framework includes authorization to raise up to $1.25 billion by selling Bitcoin in order to replenish dollar reserves. It also allows for further monetization under established conditions for preferred stock dividends, debt interest, and authorized repurchases.

The company stated that if sales are conducted beyond these purposes or authorized scope, further approval from the board of directors is required. This plan does not have a fixed expiration date, nor is there any requirement for Strategy to sell Bitcoin.

The same announcement in June also established a policy that dollar reserves should cover at least the expected preferred stock dividends and debt interest for the next 12 months. If this level is not met, authorization from the board of directors is required.

Strategy indicates that, without the need for additional board approval, reserves can only be used for preferred stock dividends and debt interest. The repurchase of common stock or preferred stock is allocated from other sources of funds, including the approved Bitcoin liquidation plan.

The company's October performance report stated that as of 2026, approximately $431.8 million in Bitcoin has been sold to fund part of the preferred stock dividends and the repurchase of STRC. Its weekly reports separately document periods when Bitcoin was purchased, sold, or neither occurred.

The impact of index exclusion first affects investors' stock holdings, not the company's cash.

MSCI decides which companies are eligible to be included in its benchmark indices, while investment managers decide how to track these indices based on the fund's authorization. If a company is removed, it means that it will be excluded from the reference portfolios that these products attempt to track.

If funds hold MSTR in order to replicate the affected index, they will need to adjust their portfolios according to the revised benchmark. Managers that use representative sampling can decide on their holdings within the scope of their investment policies; therefore, the publicly listed constituent list does not mean that each tracking product will carry out exactly the same transactions.

The 13 million shares estimated by Strategy reflect the company's view on the scale of related positions. It does not specify the predetermined execution date for each manager, nor does it indicate who will take over on the other side.

The company believes that this quantity is controllable, as it is below the average trading volume of one trading day. This comparison describes the turnover of the entire market – every completed sale has a buyer – but it does not indicate at what price the additional large-scale sell orders will be absorbed by the market.

The potential impact table for MSCI assigns a free-floating, adjusted market value of approximately $40.29 billion to Strategy. This figure represents the equity value of the company that can be included in an index at a specific point in time, rather than the amount of dollars that the tracking fund is required to sell.

Index providers have not yet released forecasts for the MSTR stock price after the decision in November. The opposition page for Strategy claims that being excluded will not have a substantial impact on the company, while its own documents continue to indicate that new issuances are still subject to market conditions.

When investors sell their existing shares, what they receive is the proceeds from the sale. Strategy Only when new shares are issued will they receive cash, just as they did during the coin purchase week in October.

This difference means that financing issues arise after portfolio adjustments. Changes in demand or the trading value of stocks may affect the terms available to the company when it issues new shares in the future, but the sale of index components themselves will not withdraw cash from the bank account designated as Strategy.

To retain the status of a constituent stock, it merely means that Strategy continues to meet the requirements in this review. This does not imply any commitment of funds to directly purchase a fixed number of new shares from the company, nor does it guarantee that the management will continue to issue shares at the previous pace.

The announcements in November will address the constituent stock issues before implementation on November 30th. Thereafter, the company's disclosures will show whether Strategy continues to raise funds and purchase Bitcoin during this period.

Financing issues are related to the next purchase.

Strategy established its Bitcoin holdings through large-scale capital fundraising, a scale that far exceeds its software business revenue. Investors purchase securities issued by the company, which then distributes the funds according to its treasury and capital management policies.

The company's performance on October 29th showed that since the beginning of the year, it has raised $21.23 billion in capital and spent $14.33 billion on purchasing Bitcoin. The announcement also indicated that revenue for the third quarter was $125.4 million.

The company reported that it achieved a net income of $5.41 billion this quarter through its market-price issuance plan. An additional $58.7 million was generated from October 1 to October 23.

The periods covered by the quarterly data and the October data are different, but the weekly disclosure documents indicate the specific sources of funds for the purchases. These documents show that the proceeds from the issuance of common shares almost covered the purchase of 250 BTC units disclosed on October 12, as well as the purchase of 267 BTC units disclosed on October 19.

The purchase of 267 BTC occurred after the sale of 140,872 MSTR. This transaction resulted in the company reporting a holding of 848,517 BTC.

The next disclosure shows that the Bitcoin balance remains unchanged. A statement on Strategy dated October 26 indicates that no Bitcoin was issued at market price, nor was any Bitcoin bought or sold between October 19 and October 25.

During that week, the company continued to repurchase STRC. It attributed this purchase of $204.9 million to cash in US dollars, which reduced its cash balance to $242.4 million while still maintaining the designated reserves.

These transactions show that management is making choices between different uses of available capital. The company can purchase Bitcoin, support reserve coverage, or repurchase securities under authorization, with each activity being reflected separately in the disclosures.

According to company policy, this reserve has been designated for preferred stock dividends and debt interest payments. If the entire balance were considered available for immediate use in purchasing additional Bitcoin, these restrictions would be ignored.

The company's capital structure means that future issuances depend on market conditions and management's assessment of shareholder value. Strategy indicates that when the trading price of MSTR approaches its indicator measured by the net Bitcoin value per share, the company will maintain discipline.

If the stock price is even lower, it means that before deducting costs, the company will need to issue more shares in order to raise the same total amount. Whether Strategy will accept such conditions, opt for other permitted sources of funding, or postpone the purchase remains a decision for the management to make.

The announcement of MSCI will not determine the price of the Bitcoin market, the demand from investors in all Strategy securities, or the company's entire financing channels. What it will determine is whether the affected stock benchmark index will continue to be included in MSTR.

The sale of Bitcoin remains a decision that requires separate authorization from the board of directors.

Index funds are not entitled to redeem their holdings of MSTR stocks as part of the company's bitcoin reserves. The securities disclosure documents for Strategy state that shareholders do not have ownership over the company's bitcoins, nor do they have the right to redeem them.

Therefore, the company's sales of Bitcoin to date this year cannot be described as index redemptions. They are corporate dispositions carried out in accordance with the company's own capital management plan.

Strategy has not announced any measures triggered by the November review. Its latest weekly report shows that no bitcoins were sold from October 19 to October 25.

Regardless of the index results, the company continues to fulfill its financing obligations, including preferred stock dividends and debt interest. According to the policies already adopted by management, designated reserves are set aside to fund these payments.

In the future documents, it will be shown whether management will use newly issued funds, existing cash, or authorized Bitcoin sales to meet these obligations as they become due. The index announcement alone does not indicate which source the company will choose.

MSCI The final list is scheduled to be released on November 11th. If a name is removed during the review in November, it will take effect after the market closes on November 30th. At that time, the subsequent share sales and Bitcoin transactions disclosed under Strategy will show how they will provide funding for the treasury operations during the implementation period.

Matters of note

• Decision on November 11: MSCI will announce the final results of the November component stock adjustment.
• Effective November 30: Any changes made in accordance with the adopted rules will take effect after the market closes.
• Fund Holdings: The updated portfolio will show how the relevant tracking products have adjusted their MSTR holdings.
• Company Transactions: The weekly file records of Strategy show the actual buying, selling, issuance, and repurchase of Bitcoin.
• Financing: The sources of funds obtained from the issuance of common shares and those listed for each Bitcoin purchase will be displayed to assess whether the company continues to raise financing during the review period.

Frequently Asked Questions

MSCI has Strategy removed yet?

MSCI has adopted the qualification rules, and Strategy has been listed in the potential impact list. The final composition of shares for November is scheduled to be announced on November 11th.

If I am eliminated, when will it take effect?

MSCI specifies November 30th as the implementation date. The announcement of constituent stocks and the effective date are two separate stages in the review schedule.

What does Strategy oppose?

The company states that its Bitcoin business is part of its operating divisions and believes that the framework of MSCI unfairly targets digital asset treasury companies. The company estimates that the related tracking products hold approximately 13 million MSTR.

MSCI How to assess qualifications?

Companies with operating assets below the core threshold of 50% are required to undergo five financial tests. At least four of these tests must be marked as failed, and the existing constituent stocks must meet the failure criteria during both of the assessed years.

Which companies are on the potential deletion list?

The list includes Strategy, Metaplanet, Yellow Cake, Skel Fjarfestingafelag, and Upexi. The financial information used is as of September 30th, and the market value is as of October 9th.

Will selling an index fund automatically lead to the sale of Bitcoin by Strategy?

No. Fund transactions involve MSTR stocks, while the company's report indicates that there are 848,517 BTC held in its treasury. Strategy has a separate set of bitcoin liquidation policies authorized by the board of directors.

Strategy Has Bitcoin been sold this year?

Yes. On October 29th, its financial results showed that approximately $431.8 million in Bitcoin had been sold so far this year to support preferred stock dividends and the repurchase of STRC. The company also reported that no Bitcoin was bought or sold between October 19th and October 25th.

What can indicate whether this decision affects the purchase of Bitcoin?

The files with Strategy will disclose information on the sale of new shares, the use of cash, and the purchase of Bitcoin. These transactions will show whether the company continues to finance the acquisition of Bitcoin after the review, and how it is financing it. This article is for educational analysis purposes only and does not constitute investment advice.