MSCI said on Thursday, Oct. 15, that it will make “non-operating companies” ineligible for its Global Investable Market Indexes. On MSCI’s own list of affected securities, that would remove Strategy (MSTR), the bitcoin-treasury company, when the November index review takes effect at the close on Nov. 30. Strategy’s stock fell 9.6% the next day, to $136.83, on 32.0 million shares traded, 1.4 times the volume of the day before.
The rule is settled. Who it hits is not, because MSCI publishes the final list on Nov. 11. TECHi read MSCI’s announcement and its screening thresholds against Strategy’s own SEC filings. On the 2025 figures, TECHi’s reading is that Strategy trips all five of MSCI’s financial tests. The open question is the money: Strategy says funds tracking MSCI’s indexes hold about 13 million of its shares, roughly $1.8 billion at Friday’s close.
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Key Takeaways
4 Points24s Read
- The ruleMSCI screens for operating assets, then for five financial ratios, and four flags make a company ineligible. Current constituents go only if they fail in each of their two most recent annual filings. The final list is due Nov. 11, and removals take effect at the close on Nov. 30.
- Strategy’s numbersBitcoin was 94.5% of its $52.6 billion in total assets on June 30, and bitcoin losses drove a $22.8 billion operating loss in the first half. On its 2025 filing, TECHi finds it flagged on all five tests.
- The moneyStrategy says MSCI-linked funds hold about 13 million shares, 3.1% of its basic shares and about $1.8 billion. MSCI’s list puts five potential deletions at $43.0 billion of float-adjusted value, 94% of it Strategy.
- What can changeMSCI may use interim filings, and Strategy’s third-quarter 10-Q is due by Nov. 9. Operating cash flow turned positive in the first half, the one test where the latest filing differs, but four flags are enough.
What did MSCI decide on Oct. 15?
MSCI published its announcement at 8:48 p.m. GMT on Oct. 15, which is 4:48 p.m. ET and after the U.S. close. It said it will adopt the proposal from its Aug. 3 consultation “with minor modifications.” Investment funds and business development companies were already ineligible. The new rule adds companies with similar characteristics, found in two steps: a core screen for substantial operating assets and, for companies that fail it, an exclusion screen built on five financial ratios. A security with four or more flags is ineligible.
The persistence rules are where the final version differs from the proposal. The August consultation said a non-constituent would face the screen on its latest filing alone. The announcement says non-constituents are ineligible if they fail in either of their two most recent annual filing periods, while current constituents are removed only if they fail in each of the two. MSCI may also use the latest interim filing. It is also ending the interim measures it announced on Oct. 10, 2025 for companies holding 50% or more of their assets in digital assets, including a freeze on increases to their share counts in its indexes.
Will Strategy be removed from MSCI indexes?
MSCI’s list of potentially affected securities, built on financial data as of Sept. 30 and market values as of Oct. 9, shows Strategy as a deletion. It is one of five. A further 17 companies sit on a watchlist, which means they would be removed only if they fail again next year. The list is labeled potential, and the final one arrives on Nov. 11.
TECHi checked Strategy’s filings against the thresholds MSCI set for current constituents. Each figure comes from Strategy’s 2025 10-K or its second-quarter 10-Q.
| MSCI test | Flagged if (current constituents) | Strategy’s filings | TECHi’s reading |
|---|---|---|---|
| Operating asset intensity | Operating assets under 10% of total assets | Bitcoin was $49.67B of $52.56B in total assets on June 30, 2026 (94.5%), and 95.5% at the end of 2025 | Flagged, if MSCI does not count bitcoin as an operating asset |
| Expense intensity | Operating expenses under 5% of total assets | Excluding bitcoin losses, operating expenses were about $196M in the first half of 2026 and $369M in 2025: 0.4% and 0.6% of assets | Flagged on TECHi’s definition of operating expenses |
| Cash flow | Operating cash flow below zero | −$53.0M in 2024, −$67.2M in 2025 and +$9.8M in the first half of 2026 | Flagged for both annual periods; the latest interim filing is not |
| Fair value intensity | Fair value changes over 5% of total assets and over 50% of sales plus fair value changes | Bitcoin unrealized losses were $5.40B in 2025 (8.8% of assets, 92% of sales plus losses) and $22.77B in the first half of 2026 | Flagged |
| Capital dependence | Financing inflows over 30% of total assets, tied to asset accumulation | Financing inflows were $24.84B in 2025 (40.3% of year-end assets) and $24.11B in the 12 months to June 30 (45.9%) | Flagged |
On that reading Strategy fails all five tests on its 2025 figures, which satisfies the first of MSCI’s two annual periods. The 2024 filing shows negative operating cash flow and bitcoin at 92.5% of year-end assets ($23.91 billion of $25.84 billion). MSCI ran its own numbers and reached the same place: its list marks Strategy for deletion.
Strategy rejects the premise. It says the proposal is a pretext for targeting digital-asset treasury companies, that “operating” and “non-operating” have no basis in U.S. accounting standards, and that it reports its bitcoin business as an operating segment under U.S. GAAP, according to its response to MSCI. Those are the company’s arguments. MSCI’s announcement shows no sign of them changing the outcome.
How much Strategy stock could index funds sell?
Nobody outside MSCI’s clients can see how much money tracks these indexes, so the figure is disputed. Strategy’s own page says funds tracking MSCI’s Global Investable Market Indexes hold about 13 million shares, 3.1% of its basic shares and less than a day of trading. At Friday’s close of $136.83, 13 million shares are worth about $1.78 billion, equal to 41% of Friday’s 32.0 million shares traded.
Two details make the number easier to believe. MSCI’s list values Strategy at $43.3 billion on Oct. 9, when the stock closed at $154.34. That implies about 281 million shares in the index. Strategy’s weighted average share count was 352.5 million in the second quarter, so MSCI is counting fewer shares than exist, which fits its freeze on share-count increases for these companies since October 2025. TECHi’s inference is that funds tracking MSCI hold shares in line with the smaller count, so their holdings are a smaller slice of the company than the index weight suggests. TECHi cannot see fund holdings and treats the 13 million as Strategy’s claim, not a fact.
For scale, the five companies on MSCI’s deletion list carry $43.0 billion of float-adjusted value, and Strategy is $40.3 billion of it. What matters for selling is how much of that value index funds actually own, and that is the number only Strategy has offered.
What could change before Nov. 11?
Three things. First, MSCI can use the most recent interim filing, and under SEC deadlines for large filers Strategy’s third-quarter 10-Q is due by Nov. 9, two days before the list. Operating cash flow was +$9.8 million in the first half, so another positive period would clear the cash-flow test. It would not rescue Strategy, because the other four flags are enough to make a company ineligible. Second, MSCI could define operating assets in a way that counts bitcoin, which would change the first test. Nothing in the announcement suggests it will. Third, the list itself: MSCI labels the current list potential, and a company’s status follows its filings, not its executives’ view of the rule.
The strongest case against alarm is Strategy’s own: if the claim of 13 million shares is right, removal means selling that is smaller than a single day’s trading, and the effect on the price could be short-lived. The evidence that would change TECHi’s reading is the Nov. 11 list leaving Strategy on it or the final methodology text counting bitcoin as operating, and either would show up in MSCI’s own documents. For readers following the dates: Strategy’s 10-Q by Nov. 9, MSCI’s final list on Nov. 11, and the close on Nov. 30, when funds that track the indexes would trade. TECHi’s earlier coverage of Strategy’s dilution and October outlook and its bitcoin purchases underwater covers the balance sheet behind these ratios.