Strategy's stock is rising as investors get some much-needed good news

By Emily Bary

Strategy gets to stay in MSCI indexes for now - though the index provider says it will launch a more general review of whether investment-oriented companies can keep their spots

Michael Saylor's Strategy is a major corporate holder of bitcoin.

MSCI offered some relief to Strategy investors on Tuesday, as the cryptocurrency holding company will get to stay in various indexes - for now.

On paper, Strategy (MSTR) is a software business, even though in practice the company has essentially become a holding vehicle for bitcoin (BTCUSD). There has been concern that Strategy's unusual nature would jeopardize its position in stock indexes.

But MSCI said late Tuesday that it "has determined at this time not to implement the proposal to exclude digital-asset treasury companies" from its indexes as part of a February review.

Strategy's stock was up about 5% in after-hours trading on Tuesday. Shares of BitMine Immersion Technologies (BMNR), which offers bitcoin-mining services but also invests in ether (ETHUSD), were up about 2%.

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In the near term, the announcement removes an overhang on Strategy shares. Cantor Fitzgerald analyst Brett Knoblauch wrote last month that the concern about potential MSCI index changes was "somewhat warranted" as it would have forced passive funds to sell Strategy shares.

But Strategy isn't out of the woods for good. MSCI instead "intends to open a broader consultation on the treatment of non-operating companies generally," it announced on Tuesday. "This broader review is intended to ensure consistency and continued alignment with the overall objectives of the MSCI Indexes, which seek to measure the performance of operating companies and exclude entities whose primary activities are investment-oriented in nature."

Determining whether companies hold digital assets or other non-operating assets for investment versus operating reasons "requires further research and consultation with market participants," MSCI noted.

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While Strategy is in various MSCI-affiliated indexes, the company doesn't yet have a place in the S&P 500 SPX, which is managed by S&P Dow Jones Indices. The company meets all the requirements for inclusion in the S&P 500, but selection is determined by a committee that has discretion about which eligible candidates to add.

Stephens analyst Melissa Roberts wrote ahead of the S&P 500's December rebalancing announcement that Strategy likely had "lower odds" than peers of getting a spot in the index, "given questions regarding index eligibility of digital-asset treasury companies."

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Strategy's stock has lost about two-thirds of its value since hitting its recent peak in July - reflecting a sharp decline in the price of bitcoin, as well as what Knoblauch thought to be unwarranted "fear-mongering" around the idea that the company could be forced to sell some of its bitcoin holdings.

-Emily Bary

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01-06-26 1821ET