Strategy Slams MSCI's Proposed Index Exclusion as "Fundamentally Flawed," Demands Withdrawal

Strategy (MSTR), the largest corporate holder of Bitcoin in the U.S., sent a letter to MSCI's equity index committee on August 31 criticizing the index provider's proposal to exclude non-operating companies from its indexes as "fundamentally flawed" and demanding its withdrawal. This marks the second time in less than a year that the company has voiced opposition to an MSCI exclusion proposal.

In a consultation paper published in August, MSCI proposed a two-stage framework that newly defines non-operating companies and excludes them from eligibility for its Global Investable Market Indexes (GIMI). If applied using data as of May this year, Strategy and Japan's Metaplanet would be subject to immediate exclusion, while three other companies—including major Ethereum holder SharpLink (SBET)—would be placed on a newly established watchlist.

In the letter, Strategy argued that the new criteria are "simply a repackaging" of a proposal MSCI had already withdrawn earlier this year, yet would "reach the same conclusion." The company criticized the move as a "pretext" for targeting companies that hold Bitcoin as a treasury asset.

Strategy took issue with MSCI's screening methodology, which relies on undefined classifications of "operating company" and "non-operating company" that do not exist under any accounting standard. The company asserted that it qualifies as an operating company under U.S. Generally Accepted Accounting Principles (GAAP), citing discussions with staff at the U.S. Securities and Exchange Commission (SEC) and the fact that its most recent quarterly report (10-Q) records Bitcoin gains and losses within operating expenses. Strategy argued that it should therefore be eligible even under MSCI's own screening criteria.