Strategy (MSTR) Faces Nasdaq 100 Removal Risk Amid Business Model Scrutiny

This analysis is based on the Reuters report [1] dated December 12, 2025, regarding Strategy (previously MicroStrategy, ticker: MSTR), a public company with 650,000 Bitcoin holdings [3]. The core issue is its potential removal from the Nasdaq 100 index during the annual reshuffle, scheduled for December 13, 2025. Concerns center on whether Strategy qualifies as an eligible non-financial operating company; analysts argue its heavy Bitcoin holdings make it resemble an investment fund, violating Nasdaq 100 eligibility criteria [1].

Price performance has been impacted: the stock dropped 18.10% over 20 trading days, 53.26% year-over-year, with YTD performance at -38.90% and 3-month decline of 44.69% [0]. Market capitalization stands at $52.65B as of December 12, 2025 [0]. The company has a profitable software business, generating $463.47M in FY2024 revenue from maintenance and subscriptions [0], but short interest at 10.27% indicates bearish sentiment [2].

The Nasdaq 100 reconstitution announcement is expected after the close on December 12, 2025, with the effective date on December 19, 2025 [1]. If removed, Strategy would lose exposure to billions in passive investment inflows [2], and the decision could prompt other index providers like MSCI to reevaluate eligibility for digital asset-heavy companies, potentially affecting peers like MARA and RIOT [2].

• Business Model Classification Risk
  : The debate over Strategy’s classification (operating company vs. investment fund) highlights gaps in current index eligibility criteria for digital asset-heavy corporations. This could set a precedent for similar companies [2].
• Passive Fund Dependency
  : Index membership exposes Strategy to significant passive inflows; removal could trigger forced selling by funds tracking the Nasdaq 100, amplifying price declines [2].
• Peer Contagion Risk
  : A removal decision might impact other Bitcoin-linked stocks (MARA, RIOT) as index providers reexamine their criteria [2].

1. Index Removal and Passive Outflows
   : If excluded from the Nasdaq 100, passive funds will rebalance, leading to potential outflows of up to $9 billion (per Yahoo Finance estimates) [2].
2. Bitcoin Volatility
   : Strategy’s 650,000 BTC holdings ($58B value) make it highly sensitive to Bitcoin price swings, which have historically driven share price volatility [3].
3. Regulatory and Classification Uncertainty
   : Emerging regulations on digital assets and treasury operations could further complicate index eligibility assessments [1].
4. Business Model Sustainability
   : The company’s focus on Bitcoin raises long-term questions about profitability and alignment with index criteria for operating companies [1].

No significant opportunities were identified in the available data. The focus remains on risk factors.

Strategy (MSTR) faces potential removal from the Nasdaq 100 due to business model concerns over its large Bitcoin holdings. The decision is expected to be announced on December 12, 2025, after market close. Recent price declines and high short interest reflect investor uncertainty. A removal would affect passive fund flows and may set a precedent for other Bitcoin-linked companies. Decision-makers should monitor the official index announcement, Bitcoin price trends, and potential regulatory or classification updates.