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Strategy Inc. Sinks to 52-Week Low Ahead of MSCI Index Decision

Investors now focus on an MSCI ruling that could force billions in passive selling.

Overview

  • Shares closed at $151.95 on Dec. 31, marking a new 52-week low and a six-month losing streak that has outpaced bitcoin’s decline.
  • MSCI is set to rule on Jan. 15 on a proposal to exclude companies with more than 50% of assets in digital assets, a move JPMorgan estimates could trigger about $2.8 billion in forced selling and as much as $8.8 billion if other index providers follow.
  • Since pledging in July not to sell stock below 2.5x mNAV, the company issued $4.9 billion of equity, including $4 billion at mNAV below 1.0x, and its mNAV has fallen below 1.
  • In a Dec. 10 letter, Michael Saylor and Phong Le argued the company is an operating business rather than an investment fund under the proposed MSCI criteria.
  • The firm continued accumulating bitcoin, adding 1,229 BTC late in December to reach 672,497 BTC, while reports indicate it still plans up to $11 billion in additional at-the-market offerings.