MSCI’s New Rules May Exclude Key Crypto Companies from Indexes
- MSCI has adopted a methodology that excludes “non-operating companies” from its Global Investable Market Indexes.
- Companies like Strategy (MSTR), Metaplanet, and Upexi face potential removal, along with others on a watchlist including Sharplink, Inc (SBET) and Ton Strategy Company (TONX).
- The final list of excluded companies will be announced on Nov. 11, with removals effective by Nov. 30, impacting passive investment demand.
- JPMorgan analysts estimate that the exclusion of Strategy could trigger approximately $2.8 billion in selling pressure.
- Strategy claims that funds tracking MSCI indexes hold about 13 million shares, representing only about 3.1% of its outstanding shares.
The new MSCI rules will assess companies based on operating assets and financial ratios, potentially leading to significant stock price pressures for those excluded from the indexes.
With an estimated $2.8 billion in selling triggered by Strategy’s potential exclusion, the impact on its market presence could be substantial as these changes take effect later this year.
