MSCI has scheduled the removal of Strategy (MSTR) from the MSCI USA Index for the November 30 close, according to CryptoSlate, which cites MSCI’s review. The outlet’s report says MSCI’s November 11 review lists STRATEGY A among the deletions.
CryptoSlate presents the exit as a financing test for the Bitcoin treasury company, since sales of common stock have recently paid for both Bitcoin purchases and preferred-share buybacks.
Where the November 2–8 proceeds went
According to Strategy’s November 9 filing, the company sold 2,051,348 MSTR shares between November 2 and 8 for $284 million in net proceeds. It reported no sales under the at-the-market programs for its listed preferred securities in that period.
Of that money, $188 million went to repurchases of STRC preferred shares, $82 million to Bitcoin and $14 million to USD Cash, according to the filing as reported by CryptoSlate. Strategy bought 1,036 BTC during the week, bringing its reported holdings to 850,364 BTC as of November 8.
The filing also reported about $18 billion of MSTR stock available for issuance and sale as of November 8. That figure is remaining capacity, not cash raised. At that date Strategy reported about $5 billion in its USD Reserve and $146 million of separate USD Cash.
Does the index exit force a Bitcoin sale?
CryptoSlate reports that index removal does not require a Bitcoin sale. Any further sales would fall under Strategy’s June monetization program, which, as described by the outlet, permits sales but obligates none.
Strategy’s October 29 results disclosed about $432 million of Bitcoin sold year to date, reportedly to fund part of preferred dividends and STRC buybacks. The figure comes from the company’s own results as relayed by CryptoSlate.
In its consultation response, Strategy estimated that funds linked to MSCI’s global investable indexes held about 13 million shares, or 3.1% of basic shares outstanding, according to CryptoSlate. The date of that holdings estimate is not given.
What remains unknown
It is unclear how much selling by index-tracking funds will occur and what effect it could have on MSTR’s price and demand. It is also unknown whether Strategy will sell more Bitcoin or change its funding mix after the removal, and whether Strategy or MSCI has commented officially beyond the documents cited.
Sources
- cryptoslate.com CryptoSlate — Strategy spent more than twice as much on preferred-share buybacks as Bitcoin. Now comes its MSCI exit Accessed
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