Strategy founder Michael Saylor and CEO Phong Le wrote a letter to MSCI on Monday urging the index provider to withdraw a proposed eligibility test that could remove the Bitcoin treasury company from its global benchmarks. The executives described the proposal as discriminatory, arbitrary, and misguided, arguing that it serves as a pretext for targeting digital asset treasuries.
The MSCI consultation, opened in August, addresses what the index provider classifies as non-operating companies. Under the proposal, issuers whose operating assets fall below half of their total assets face a five-flag screen based on operating asset intensity, expenses, cash flow, fair-value swings, and dependence on external financing. Companies that trip four of these flags become ineligible for inclusion.
MSCI's consultation lists three companies facing potential deletion: Strategy, with a float-adjusted market capitalization of $23.93 billion; UK uranium holder Yellow Cake at $1.81 billion; and Japan's Metaplanet at $654 million. Three additional firms would be placed on a public watchlist, including Ethereum treasury SharpLink, Taiwan's Center Laboratories, and Turkey's Lydia Holding. Strategy's letter noted that Strategy accounts for approximately 87% of the float-adjusted market capitalization at stake across all six affected companies.
In their letter, Saylor and Le argued that Strategy defines its Bitcoin treasury operations as a separate reportable operating segment in its second-quarter 10-Q filed August 3, and records Bitcoin fair-value changes within operating expenses. Based on this accounting treatment, the letter asserts that Strategy does not trip the expense or fair-value flags.
The executives stated that while the proposal would have no meaningful impact on Strategy's business, it would profoundly harm MSCI's reputation as a neutral index provider. A campaign page hosting the letter indicates that funds tracking GIMI indexes hold 3.1% of basic shares, while JPMorgan analysts previously estimated that an MSCI exclusion could trigger billions in outflows.
Feedback for the MSCI consultation closes on September 30, with results scheduled for release on October 16 and any resulting changes taking effect in the November index review. Monday's letter concluded with a request for MSCI to place a legal hold on all documents concerning the development of the test.
