Michael Saylor’s MicroStrategy Faces MSCI Index Exclusion Deadline: January 15 Showdown Looms

MicroStrategy's high-stakes gamble on Bitcoin faces a potential institutional reckoning. The business intelligence firm, led by crypto evangelist Michael Saylor, is now in direct talks with index provider MSCI. The topic? A possible removal from its influential indexes by mid-January.

The Clock is Ticking

The January 15 deadline isn't just a date on a calendar—it's a line in the sand for traditional finance. MSCI's indexes are the bedrock for countless ETFs and institutional portfolios. Getting booted could trigger automated sell-offs from funds mandated to track them, a brutal form of passive aggression from the legacy system.

Saylor's Counterplay

This isn't a passive wait. Saylor is engaging, a move that signals a fight for legitimacy. The argument likely hinges on whether MicroStrategy is still a 'software company' or has morphed into a de facto Bitcoin holding vehicle—a distinction that makes traditional finance types break out in hives. It's a classic clash between disruptive asset strategy and rigid classification rules.

Why This Matters Beyond One Stock

The outcome sets a precedent. If a publicly-traded company can be punished for embracing Bitcoin too openly, it chills corporate adoption. A removal validates the old guard's skepticism; staying in is a quiet victory for crypto's infiltration of the mainstream portfolio. It’s finance’s version of ‘if a tree falls in a forest’—does a Bitcoin-heavy balance sheet still make sound in the index world?

The finance jab? Watching index providers debate 'what is a company' while algorithms do 90% of the trading is peak modern market irony. The verdict lands soon. Whether it's a stumble or a stride for crypto-correlation, all eyes are on January 15.

Michael Saylor Weighs In On Exclusion Concerns

MSCI has stated that by January 15, it will decide whether to remove companies whose business models focus on purchasing cryptocurrencies, amid concerns that these firms resemble investment funds, which are currently ineligible for index inclusion.

Reuters reported that Saylor acknowledged the discussions with MSCI but expressed skepticism regarding JPMorgan’s projections of potential outflows. He commented, “It won’t make any difference, in my opinion,” regarding the implications of a possible exclusion. 

Saylor noted that the equity associated with Strategy is inherently volatile due to its significant reliance on Bitcoin’s (BTC) price. He cautioned, “If Bitcoin falls 30% or 40%, then the equity is going to fall more, because the equity is built to fall.” 

Currently, Strategy operates with a leverage ratio of 1.11, and Saylor indicated that the company could withstand a steep decline of 95% in bitcoin prices.

Reports from NewsBTC indicated that Saylor Strategy’s position emphasizing that it is not merely a passive Bitcoin holding entity. Instead, he highlighted that the company functions as a software firm with a proactive financial strategy, countering the narrative surrounding MSCI’s concerns.

Strategy Establishes New USD Reserve 

The recent fluctuations in Bitcoin prices have reignited fears of a potential bear market, raising questions about whether Strategy WOULD consider selling some of its substantial Bitcoin reserves, currently exceeding 650,000 coins. 

This speculation intensified after Strategy CEO Phong Le addressed the possibility of selling some holdings during an interview on the “What Bitcoin Did” podcast. 

Le stated that if the company’s stock trades below the value of its Bitcoin holdings and it is unable to raise additional capital for preferred dividends, a sale might become unavoidable. 

“If the stock trades below the value of our Bitcoin, then mathematically we would have to sell some Bitcoin. It would be the last resort,” he explained.

To support this vision, the Virginia-based company recently announced the establishment of a $1.44 billion reserve fund allocated for dividend payments on preferred stock and to meet its debt obligations.

The newly created reserve is funded through proceeds from its at-the-market stock offering. The company aims to maintain a balance sufficient to cover at least 12 months of dividends, with ambitions to extend this coverage to 24 months or more in the future. 

Saylor remarked, “Establishing a USD Reserve to complement our BTC Reserve marks the next step in our evolution. We believe it will better position us to navigate short-term market volatility while delivering on our vision of being the world’s leading issuer of Digital Credit.”

At the time of writing, Bitcoin was trading just above $93,000, marking a 4.5% increase over the past 24 hours. MSTR, the stock of the investment firm Strategy, traded up 2% in the premarket. 

Featured image from Bloomberg, chart from TradingView.com