The revised rules finalized on October 15 by MSCI (a leading global index provider whose benchmarks are tracked by funds worldwide) for companies with no operating business (whose primary purpose is to hold assets) have heightened uncertainty among digital asset treasury (DAT) companies, which $BTC (+0,03 %), $ETH (-0,09 %) hold other tokens. Strategy and Metaplanet (a Japanese publicly traded company with a Bitcoin holding) were identified as potential candidates for exclusion, while $ETH (-0,09 %) SharpLink was placed on a watchlist. The final list is scheduled to be published on November 11, and the changes will take effect at the close of trading on November 30.
According to Strategy’s estimates, MSCI-related funds hold approximately 13 million shares. This corresponds to 3.1 percent of the outstanding shares (undiluted) and, at October 23 prices, a value of approximately $1.9 billion. In our view, the overarching significance for DATs lies in the potential implications for future financing. While an index-driven sell-off would not force direct sales of cryptoassets, weaker demand for shares could narrow the premium over the net asset value (NAV), which is what makes new share issuances advantageous for existing shareholders in the first place.
For Strategy, this underscores the importance of capital allocation. Since July 27, the company has raised $4.2 billion through the sale of common stock, repurchased $2 billion worth of STRC (Strategy’s preferred stock with a variable dividend and indefinite term), and, on a net basis, #bitcoin purchased an additional $447 million worth of shares. While the buybacks reduce the current dividend burden on STRC from 12 percent, they also tie up liquidity. Sustainable financing is thus becoming increasingly crucial for value creation. For shareholders, the key question is whether Strategy, like other DATs, can continue to increase the Bitcoin value per share while keeping the costs of the necessary financing under control.
