MSCI to drop Strategy from global indexes,
putting billions in fund inflows at risk
Nov 11 (Reuters) - Index operator MSCI will remove Michael Saylor's Strategy (MSTR.O), opens new tab and other companies from its global indexes after determining they more closely resemble investment funds, a move that could curb passive investment flows into the stocks.
MSCI last year proposed to exclude digital asset treasury companies whose holdings represent 50% or more of their total assets and then launched a broader review into what it called "non-operating companies." Such companies have fund-type characteristics, which are excluded from its benchmarks, it added.
Strategy's shares fell 2.5% in extended trading on Wednesday.
The company warned last year that an exclusion would result in $2.8 billion of its stock being liquidated and would "chill" the industry.
Tokyo-listed Metaplanet (3350.T), opens new tab, which also buys and holds bitcoin , and UK-based uranium-buying company Yellow Cake (YCA.L), opens new tab were also on the exclusion list. The companies will be removed from the MSCI USA and MSCI World indexes on December 1.
Strategy, Metaplanet and Yellow Cake did not immediately respond to Reuters requests for comment.
Saylor-led Strategy pioneered digital-asset treasuries last year, often issuing fresh debt and equity to fund aggressive bitcoin accumulation.
The approach attracted investors seeking indirect exposure to crypto and boosted bitcoin prices, but it also left the companies vulnerable to the volatility of crypto prices.
Strategy's shares have slid around 20% so far this year, while bitcoin prices are down 15%.
Index inclusion matters to companies such as Strategy because passive funds and other investors tracking benchmarks are required to hold their shares.
MSCI's shake-up could lead to outflows of as much as $8.8 billion from Strategy stock if other index providers follow suit,
J.P. Morgan had previously estimated.Companies such as Ethereum treasury platform SharpLink (SBET.O), opens new tab were on the watchlist, according to the list published by MSCI on Wednesday.
Reporting by Johann M Cherian and Pritam Biswas in Bengaluru and Elizabeth Howcroft in London; Editing by Shilpi Majumdar, Sriraj Kalluvila and Leroy Leo
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He also said that BTC next year will have an appreciation of 10% per year, but from what value for each BTC he did not say