Michael Saylor’s Strategy Just Lost Its MSCI Index Spot as Bitcoin Plunges. Is MSTR Stock a Sell?

Resumen detallado

With an index provider cutting it loose and bitcoin sitting below its purchase price, Saylor's funding machine faces its toughest test yet. A cash cushion buys time, but one signal could decide whether patience pays off.

Strategy (NASDAQ:MSTR) trades at $111.62. Michael Saylor's bitcoin vehicle is under pressure from two sides at once: an index provider is dropping it, and the coin it holds keeps falling.

Strategy pairs a legacy MicroStrategy analytics software business with the largest corporate treasury of Bitcoin (CRYPTO:BTC). It held 848,517 BTC at its last quarterly report. It pays for those purchases by selling common stock, convertible notes, and preferred shares, and it has raised $21.23 billion this year. MSCI (NYSE:MSCI) will now delete the company from its equity indexes under new rules for non-operating companies, effective at month-end. The stock's Nasdaq listing is unaffected.

Strategy trades at a price-to-book ratio of 0.852, so the market values the equity below its stated book value. Last quarter showed what happens when bitcoin rallies. GAAP diluted EPS of $44.75 beat the $17.98 consensus as bitcoin rose 43%.

USD Assets of $5.07 billion cover 3.4 years of dividends and interest. A $1.0 billion MSTR buyback authorization has not been used yet. Index selling happens once and then stops, and some of it may already be priced in. Saylor says bitcoin is entering its next bull market.

SoFi Active Invest is offering a limited-time promotion. Open an account, fund it with $50 or more, and you could receive up to $1,000 in complimentary stock for Active Invest accounts. See for yourself by clicking here now. (Sponsor)

MSCI found that companies dominated by non-operating financial assets look more like investment vehicles than operating businesses. Strategy had previously estimated that removal could cause about $2.8 billion in selling. JPMorgan Chase (NYSE:JPM) estimated outflows of up to $8.8 billion if other index providers follow. Barron's reports that investors are dumping a chunk of the stock.

Bitcoin now trades at $65,415, below the company's average cost of about $75,456 per coin on 850,364 BTC.

Removal from the index carries no requirement to sell bitcoin, and the coin…

Inicio del artículo, extracto de Yahoo Finance. Para leer el resto, abra el artículo en el sitio del medio.