Michael Saylor, co-founder and executive chairman of Strategy, downplayed growing fears this Friday regarding the company’s potential exclusion from major stock indices next year. Amid a severe 43% drop in share value over the past month, the executive vigorously defended his corporate Bitcoin bet against criticism.
Saylor argued on social media that his business model is unique and should not be confused with a traditional investment fund, reaffirming his unwavering commitment to the long-term digital treasury strategy.
The company currently faces considerable financial pressure, with its shares trading dangerously close to 13-month lows, hovering around 175 dollars. The value of its Bitcoin reserve reaches 55 billion dollars, a significant figure though lower than the 80 billion dollars recorded at its October peak. Saylor emphatically highlighted that Strategy is a publicly traded operating company with a 500 million dollar software business, using the leading cryptocurrency as active productive capital rather than acting simply as a passive holding or static trust.
Will the hybrid business model survive the reclassification of global indices?
This tense situation stems from a recent JPMorgan report pointing out MSCI’s internal deliberations on the treatment of companies that accumulate crypto assets aggressively. The index provider will announce its final decision on January 15, evaluating whether to exclude firms whose digital holdings exceed the 50% threshold of their total assets.
Although Strategy managed to enter the Nasdaq-100 last year, it was recently passed over for inclusion in the S&P 500, while other sector firms like Coinbase and Robinhood were admitted, underscoring current classificatory uncertainty.
The firm’s market capitalization has fallen below the net value of its Bitcoin holdings, which significantly complicates its future ability to raise funds through traditional methods. Historically the company issued common shares to fund its purchases, but recently it has had to resort to preferred shares offering dividends to maintain investor appeal.
Despite these structural challenges, Saylor insists that index classification does not define the company, positioning it as a structured finance firm capable of innovating simultaneously in software development and complex capital markets.
Will investors continue backing the treasury strategy against current volatility?
General market sentiment remains mixed and cautious, although prediction platforms like Myriad indicate that only 6% believe the company will sell its assets this year. Strategy seeks to consolidate itself as a Bitcoin-backed financial entity, challenging traditional Wall Street conventions and the sector’s inherent volatility. On the other hand, the drop in share price reflects investor fear that an index exclusion could trigger a forced sale by passive funds that replicate these indicators.
Institutional and retail investors await regulatory and market moves with caution in the coming weeks. MSCI’s decision could set a crucial precedent, redefining the rules of the game for corporations deciding to adopt digital assets as a primary store of value. Meanwhile, the company stands firm in its vision, betting that financial innovation and hard asset holding will prevail over the technical doubts of index providers in the long run.
