MSCI's new non-operating company rule puts Strategy on its list for deletion from global indexes

Strategy, the bitcoin-buying company chaired by Michael Saylor, could be dropped from MSCI's global stock indexes next month. MSCI said on Thursday that it will bar companies it classifies as non-operating, and a list it published alongside the decision marks Strategy as a potential deletion in its November review. The final list is due Nov. 11.

What MSCI decided

MSCI said after the U.S. market closed on Thursday, Oct. 15, that it will treat "non-operating companies" as ineligible for its Global Investable Market Indexes. The index provider is adopting, with what it called minor modifications, a proposal it put out for consultation on Aug. 3. The change will be made in the November index review and takes effect at the close of trading on Nov. 30.

MSCI already keeps investment funds, business development companies and other passive vehicles out of these indexes. The new rule extends that treatment to companies whose finances look similar. Each company is first checked for whether it has substantial operating assets. A company that fails is then tested against five financial ratios, and one flagged on four or more of them becomes ineligible.

Current index members get some leeway. They will be removed only if they fail the screen in each of their two most recent annual filing periods, while a company outside the index is barred from joining if it fails in either one. MSCI said it may also use a company's latest interim filing.

Strategy dwarfs the rest of MSCI's list

MSCI's announcement names no companies. A list it posted alongside, built on financial information as of Sept. 30, marks five current index members as potential deletions at the November review. Strategy is listed as a large-cap constituent with a float-adjusted market value of $40.3 billion as of Oct. 9, according to MSCI. That is about 93.6% of the $43.0 billion total for all five, by TickerGrove's calculation.

The other four are Britain's Yellow Cake, Japan's Metaplanet, Iceland's Skel Fjarfestingafelag and U.S.-based Upexi. Another 17 companies, including SharpLink, are on a watchlist. When MSCI tested the screen on May data in its August consultation paper, it found three deletions and three watchlist names in its ACWI IMI index.

MSCI is also ending the interim measures it adopted in October 2025 for companies whose digital-asset holdings make up 50% or more of their total assets. Those measures froze increases in the share counts and inclusion factors MSCI uses for such companies and put their index additions and size-segment moves on hold. From the November review, those companies will be judged under the new test instead.

The decision closes a review that began a year ago. MSCI first proposed excluding companies with large digital-asset holdings, deferred that plan in January and opened the broader review of non-operating companies, Reuters reported.

Strategy's case against the rule

In an Aug. 31 letter to MSCI's equity index committee, signed by Executive Chairman Michael Saylor and Chief Executive Phong Le, Strategy called the proposal "discriminatory, arbitrary, and misguided" and asked MSCI to withdraw it. The company said it is an operating business, pointing to about 1,500 employees and an enterprise-analytics software business that it said brings in nearly half a billion dollars a year. It also said it reports its bitcoin operations as a separate operating segment and records bitcoin gains and losses as operating expenses.

Adoption "would have no meaningful impact on Strategy's business," the letter said, but would harm MSCI's reputation as a neutral index provider. If MSCI went ahead, Strategy asked that the test apply only to filings made after it takes effect. Strategy did not immediately respond to a Reuters request for comment on the decision.

How the shares traded

Strategy's class A shares closed at $136.83 on Friday, the first trading session after the announcement, down 9.6% from Thursday's close of $151.29. About 32 million shares changed hands, up from about 22 million on Thursday. The Nasdaq Composite fell 2.1% on Friday, and bitcoin slipped about 1% over the same period, by TickerGrove's calculation from CoinGecko prices.

Why index membership matters

Funds that track MSCI benchmarks must hold the stocks in them, so a deletion would typically lead those funds to sell. Strategy belongs to the MSCI USA and MSCI World indexes, Reuters reported. The news agency also reported that the company warned last year that an exclusion would lead to about $2.8 billion of its stock being sold.

What happens next

MSCI will publish the final list of affected companies on Nov. 11, as part of its November index review announcement. Any deletions would take effect at the close of trading on Nov. 30.