MSCI Removes MicroStrategy From USA Index, Forcing Fund Sales

MSCI removes MicroStrategy — Index provider MSCI will remove MicroStrategy from its USA Index effective November 30, compelling passive funds that track the benchmark to sell their holdings in the largest corporate bitcoin holder.

The deletion is a result of MSCI’s newly adopted methodology screening for “non-operating” issuers, which applies a series of financial ratios to companies where operating assets are less than half of total assets. The rule replaces a prior, more direct proposal to exclude firms whose digital assets exceeded 50% of total assets.

Funds tracking MSCI’s USA, World, and ACWI indexes must sell MicroStrategy shares by the November 30 close. While MSCI has not provided an estimate of the forced selling volume, JPMorgan analysts previously estimated an exclusion could trigger billions in outflows from the stock. The removal does not delist the company or force it to sell its 850,364-bitcoin treasury.

In its August index review, MSCI also flagged 17 other constituents for potential deletion under the new screen, including SharpLink and TON Strategy, but did not remove them in this latest announcement. MicroStrategy shares traded at $120.50 in extended trading following the news.