Strategy has successfully maintained its position in the Nasdaq 100 through the year’s rebalancing, marking its first proven resilience since it joined the index in December of last year.
The company, which previously operated under the name MicroStrategy, now holds the title of the largest corporate owner of Bitcoin. Recently, it acquired 10,624 Bitcoin for approximately $962.7 million, bringing its cumulative total to 660,624 BTC, valued at nearly $60 billion.
In this latest adjustment, notable firms like Biogen, CDW, GlobalFoundries, Lululemon, On Semiconductor, and Trade Desk were removed from the Nasdaq, while Alnylam Pharmaceuticals, Ferrovial, Insmed, Monolithic Power Systems, Seagate, and Western Digital were introduced into the index, as reported by Reuters.
Despite its stability within the index, shares of Strategy saw a decline of 3.74% on that day. They have generally trended downward, experiencing a loss of over 15% in just the past month.
Strategy shares down 15% over the past month. Source: Google Finance
MSCI Review Threatens Strategy’s Inclusion
The consideration of Strategy’s inclusion in the Nasdaq 100 is notable due to its atypical business approach and the ongoing discourse on whether such firms act more like functioning businesses or merely investment avenues.
This dialogue escalated this year as MSCI commenced a review on how to categorize entities that primarily seek capital to acquire digital assets. The index provider is contemplating the exclusion of companies holding over 50% of their total assets in cryptocurrency, which could jeopardize Strategy’s standing in January. A warning from JPMorgan suggested that passive funds might be forced to sell approximately $2.8 billion in Strategy shares should MSCI proceed with this exclusion.
Strategy’s executive team has expressed strong disagreement with this notion, emphasizing its operational status. In a letter to MSCI dated December 10, both Michael Saylor and CEO Phong Le highlighted that their company should not be viewed solely as a passive Bitcoin holder but as an active business that employs various financial instruments to fund its acquisitions.
Strategy Raises $1.4 Billion Amid Market Doubts
In response to growing concerns regarding its capability to uphold dividend and debt responsibilities amid a declining share price, Strategy successfully raised $1.44 billion. CEO Phong Le commented on the situation, saying, “There was FUD that was put out there that we wouldn’t be able to meet our dividend obligations, which causes people to pile into a short Bitcoin bet.”
During the Bitcoin MENA event in Abu Dhabi, Saylor remarked he has engaged with sovereign wealth funds and financial institutions to advocate Bitcoin as “digital capital” and “digital gold,” stressing the potential for a new category of “digital credit” built atop Bitcoin to offer returns without the typical asset volatility.
