Saylor's Strategy engaging with MSCI on potential index exclusion
By Utkarsh Shetti and Federico MaccioniStrategy , the world's biggest corporate stockpiler of bitcoin, is engaging with MSCI about a decision that could potentially exclude it from its indices, its chairman Michael Saylor told Reuters on Wednesday. Index provider MSCI is due to make that decision on January 15, in a shake-up that could lead to outflows of as much as $8.8 billion if other index providers follow suit, according to a JP Morgan note last month.Strategy is currently part of the MSCI USA and MSCI World indices, with a chunk of its market value tied to benchmarks through passive vehicles such as ETFs."An exclusion would cast doubts on the company's costs and ability to raise equity and debt in the future," JPM said in its note.Asked whether the company was in conversation with MSCI, Saylor said: "we're engaging in that process," adding he "was not sure" that JP Morgan's numbers on the outflows were correct.He also commented on the recent fall in the price of the world's biggest cryptocurrency, which had reached a record high above $120,000 in October, propelled by U.S. President Donald Trump's friendly stance on crypto and favorable regulatory changes globally, but has declined steeply since. Increased cautiousness over riskier assets, spurred by the spectre of an AI bubble amid lofty tech valuations and overall economic uncertainty, has soured the rally in recent weeks. Strategy's shares are down over 37% this year. "The equity is going to be volatile because the company is built on amplified bitcoin. If bitcoin falls, you know, if it falls 30%, 40% then the equity is going to fall more, because the equity is built to fall," Saylor told Reuters in an interview on the sidelines of a Binance event in Dubai. Strategy operates as a digital asset treasury, a vehicle that stockpiles cryptocurrencies in a bid to capitalise on spikes and enable more cautious investors to gain exposure to the riskier assets. Its meteoric success has inspired a rise in the number of publicly traded firms following that playbook, but the recent slump could force these companies to sell their holdings and add downward pressure on prices.