MicroStrategy (MSTR) Index Exclusion Risk Analysis Report

On November 21, 2025, Michael Saylor, founder of MicroStrategy (NASDAQ: MSTR), defended the company’s business model as an operating software firm with a Bitcoin treasury strategy amid growing concerns about potential exclusion from major equity indices like MSCI and Nasdaq 100 [User Event]. MSCI is evaluating whether companies with significant digital asset holdings qualify as traditional operating businesses (eligible for indices) or investment funds (ineligible), with a decision scheduled for January 15, 2026 [1][2].

• MSTR Price Movement:
  MSTR closed at $171.09 on November 21, down 3.41% intraday, with elevated trading volume (23.87M shares vs. 12.63M average) indicating increased investor anxiety [0].
• Weekly Trend:
  Over the past week (Nov 14–21), MSTR has declined by ~14.7% due to mounting exclusion risk [0].

• Passive Outflows:
  JPMorgan warns exclusion from MSCI alone could trigger $2.8B in mechanical selling pressure; total outflows could reach $8.8B if other index providers follow suit [2][4].
• Liquidity & Capital Raising:
  Exclusion may reduce trading volumes and limit the company’s ability to raise equity/debt [1][3].

• Analyst Divide:
  Despite the risk, 55.2% of analysts rate MSTR as “Buy” with a consensus target price of $517 (202% upside), while 13.8% recommend “Sell” [0].
• Market Perception:
  Investors are split between Saylor’s operating business claim and MSCI/JPMorgan’s view of MSTR as an investment fund [User Event][1][2].

• Directly Impacted:
  MicroStrategy (MSTR) [0]
• Related Sectors:
  Technology (MSTR underperforms the sector, which is up 0.7% intraday) [0]
• Passive Funds:
  Index-tracking vehicles holding MSTR (e.g., MSCI USA Index funds) [1][2]
• Indirectly:
  Bitcoin (MSTR’s treasury holds ~649,870 BTC, so its equity status affects crypto-linked investors) [2]

• Exact MSCI threshold for digital asset holdings (% of total assets) leading to exclusion [1][2].
• Whether S&P/Nasdaq will adopt similar rules for MSTR [1][3].
• Exact portion of MSTR’s shares held by passive funds [2].

• Index Exclusion:
  Users should be aware that MSCI’s January decision could trigger significant mechanical selling pressure [1][2][4].
• Financial Strain:
  The company’s current ratio of 0.66 indicates short-term liquidity risk, and negative profitability metrics raise concerns about long-term sustainability [0][3].

1. MSCI’s January 15, 2026 decision on index eligibility [1][2].
2. Bitcoin price movements (correlated with MSTR’s treasury value) [2].
3. Updates from other index providers (S&P, Nasdaq) on digital asset holding rules [1][3].
4. MicroStrategy’s efforts to improve liquidity or reduce debt [0][3].