Author: Deep Tide TechFlow

On November 12, MSCI officially published the MSCI November Index Review List, including Strategy (MSTR) Class A shares in the MSCI US Index removal list. This adjustment is based on data as of the price cutoff date of October 20, and will take effect after the market closes on November 30.

The day before, ahead of the US stock market opening, the market was still concerned about the institution's estimate of up to $2.8 billion in potential passive selling pressure. With the release of the final audit documents after trading hours on November 11 in the US East, Strategy simultaneously lost its positions in the MSCI Global and ACWI indices, marking the official countdown to liquidation after nearly a year of assessment.

Non-operational new rules remove all five companies

The public list shows that the MSCI US Index this month added only one new stock, Moderna, but simultaneously removed 24 targets, with Strategy prominently included. This action stems from the MSCI Non-operational Entity New Rules finalized on October 15.

According to the new rules process, issuers lacking substantial operating assets must undergo five financial ratio screenings, losing index eligibility if four or more are triggered; existing component stocks that fail to pass for two consecutive reporting periods will be removed, with all five reserve companies previously under observation now out.

In addition to Strategy, Japan's Metaplanet has exited the Japanese small-cap index, UK uranium miner Yellow Cake has exited the UK small-cap index, and Iceland's Skel and the US's Upexi have also left their respective indices, with Strategy accounting for over 90% of the combined affected market value.

Post-market slight decline and comparison of dual passive selling pressure metrics

The market reaction on the night the decision was made was relatively restrained. According to market data, on November 11, MSTR rose 1.06% during regular trading to $122.35, but after the formal announcement, it fell 1.51% in after-hours trading to $120.50.

In terms of fund outflow metrics, JPMorgan previously estimated that the removal would lead to approximately $2.8 billion in passive selling; while Strategy itself disclosed that passive funds tracking MSCI held about 13 million shares, accounting for approximately 3.1% of the basic outstanding shares, estimated at about $1.59 billion based on the closing price of $122.35.

Stock price enters discount period without affecting spot Bitcoin positions

This liquidation coincides with a shift in the company's valuation logic. According to Disruption Banking's premium analysis, as of November 8, Strategy held 850,364 Bitcoins, with a total cost of $64.16 billion, at an average holding price of $75,456.

After the adjustment, the MSTR stock price has now turned to a discount to its net asset value in Bitcoin. The previous financing wheel relying on high premiums to raise funds for Bitcoin purchases has long been under pressure, and the concentrated release of passive selling will further limit future equity refinancing space.

In response to the outcome, Strategy's Executive Chairman Michael Saylor and CEO Phong Le had previously criticized the rules as discriminatory, while Metaplanet's CEO Simon Gerovich stated that the adjustment would not change his accumulation plan.

Mechanically, the removal from the index only requires passive stock funds to reduce their holdings in MSTR and does not require the company to sell Bitcoin spot. From now until the market closes on November 30, index funds must complete their portfolio adjustments, and MSTR needs to absorb this batch of selling pressure within the discount period.