Strategy Shares Fall 3% as MSCI Introduces Index Eligibility Rules That Could Lead to Removal

Strategy (NASDAQ:MSTR) shares declined 3% in premarket trading on Friday, 16 October 2026, after MSCI announced changes to its index eligibility methodology that could result in the company’s removal from its indexes.

The revised framework follows a consultation examining how non-operating companies should be treated within MSCI’s equity indexes. The changes are scheduled to take effect during the November index review.

Strategy, formerly known as MicroStrategy, is among the companies previously identified by MSCI as potentially ineligible under its proposed methodology.

The decision introduces new financial and operational criteria that will replace temporary restrictions focused on companies holding substantial digital asset reserves.

MSCI Introduces New Financial Tests for Index Eligibility

Under the revised methodology, MSCI will assess companies using operating asset screens and five financial ratios to determine whether they qualify for inclusion in its indexes.

The new framework replaces interim restrictions that specifically targeted companies whose digital asset holdings represented at least 50% of total assets.

Instead of relying primarily on the proportion of assets held in cryptocurrencies, MSCI will apply a broader assessment of whether a company meets its operating business requirements.

The methodology is intended to establish eligibility criteria for non-operating companies while providing additional rules governing index inclusion and removal.

MSCI also introduced measures designed to limit unnecessary changes in index composition.

“To reduce index turnover, buffers will apply to both the eligibility thresholds of the financial ratios and the timing of index inclusion and removal. Non-constituents will be ineligible for addition if they fail the ineligibility screen in either of their two most recent annual filing periods,” MSCI said.

“Current constituents will be removed only if they fail the ineligibility screen in each of the two most recent annual filing periods.”

The index provider added that it may consider information from the most recent interim financial filing where available.

These provisions mean that companies already included in MSCI indexes will generally face a different assessment from businesses seeking initial inclusion.

Strategy Among Companies Facing Potential Index Exclusion

MSCI had previously identified Strategy as a company that would be removed from its indexes under the non-operating companies methodology.

Other companies potentially affected by the revised eligibility requirements include Sharplink, Ton Strategy Company, Solana Company and DeFi Development Corp.

These businesses are among those expected to appear on a watchlist for possible exclusion.

Placement on the watchlist does not necessarily mean that a company will be removed immediately.

Under the new rules, existing index constituents must fail the relevant eligibility screening in both of their two most recent annual reporting periods before removal is triggered.

MSCI may also incorporate more recent interim financial information into its assessment.

The final outcome for individual companies will therefore depend on how their financial statements and operating assets are evaluated under the revised methodology.

Strategy Previously Opposed MSCI’s Proposed Changes

Strategy challenged the proposed eligibility restrictions earlier this year, arguing that they unfairly targeted companies using digital assets as part of their treasury strategies.

Executive Chairman Michael Saylor and Chief Executive Officer Phong Le described the proposal as “discriminatory” towards digital asset treasury companies.

In a September letter, Strategy argued that the changes would have limited consequences for its own operations but could damage confidence in MSCI’s independence as an index provider.

“If adopted, the proposal would have no meaningful impact on Strategy’s business, but it would profoundly harm MSCI’s reputation as a reliable and neutral index provider,” the company wrote.

Strategy’s objections focused on the treatment of digital asset treasury companies within the index eligibility framework.

The final methodology moves away from the earlier threshold based specifically on digital asset holdings, although Strategy remains among the companies potentially affected by the broader financial screening requirements.

MSCI-Tracking Funds Hold Approximately 13 Million Strategy Shares

Strategy previously provided estimates of the potential ownership exposure associated with funds tracking MSCI indexes.

According to the company, funds tracking MSCI’s Global Investable Market Indexes hold approximately 13 million Strategy shares.

That represents around 3.1% of the company’s basic shares outstanding.

Strategy also stated that the estimated holdings were equivalent to less than one day’s trading volume in its shares.

The figures provide context for the potential scale of index-related selling if the company were eventually removed.

However, they do not establish how much selling would occur, as the actual impact would depend on the final eligibility decision and the trading decisions of individual funds.

An index exclusion could require funds that closely replicate the affected indexes to adjust their holdings, while other investors may not be subject to the same requirements.

Final List of Affected Companies Expected on 11 November

MSCI is expected to publish its final list of potentially affected companies on 11 November, providing greater clarity about which businesses could face removal under the new methodology.

The November index review will also mark the introduction of the revised eligibility framework.

For Strategy, the immediate focus will be on whether its financial statements and operating assets satisfy MSCI’s requirements.

The introduction of the two-year assessment period for existing constituents may influence the timing of any potential removal, depending on the company’s eligibility results.

MSCI’s decision does not itself confirm that Strategy will be excluded from its indexes.

Investors Assess Potential Impact on Strategy Shares

Strategy’s 3% premarket decline followed the announcement of the revised methodology, reflecting market attention to the possibility of index-related selling.

Although the company has argued that exclusion would not materially affect its underlying business, changes in index membership can influence demand from passive investment funds.

The revised rules also have implications for other companies with substantial digital asset holdings, particularly those whose business models may fall within MSCI’s definition of non-operating companies.

Investors will be watching the publication of the affected-company list on 11 November and the application of the new financial screening criteria.

Until MSCI completes its assessment, Strategy’s potential removal remains uncertain.

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