Strategy (formerly known as MicroStrategy) stock (MSTR) fell on Friday as investors assessed the potential removal of the Bitcoin treasury company from MSCI’s global equity indexes, despite a rise in Bitcoin prices.
The company also announced plans to maintain a 12% annualised dividend rate on its STRC preferred stock for November, subject to shareholder approval and related amendments taking effect.
Strategy shares declined 6% on Friday, while Bitcoin traded around $82,290, having gained more than 1.3% over the previous 24 hours.
Strategy, led by Michael Saylor, is the world’s largest corporate Bitcoin holder, with 848,250 BTC.
The stock’s decline highlights how factors beyond cryptocurrency prices, including index inclusion and financing costs, can influence investor sentiment towards the company.
MSCI rules put Strategy’s index inclusion at risk
MSCI said on Thursday that non-operating companies would be ineligible for its Global Investable Market Indexes from the close of November 30.
The index provider plans to publish the final list of affected companies on November 11.
Strategy and Japan’s Metaplanet are among the companies potentially facing removal.
SharpLink and several other cryptocurrency treasury companies are on a watchlist for possible exclusion.
The policy follows a review that MSCI began last year into whether digital asset treasury companies resemble investment funds, which are already excluded from its indexes.
MSCI deferred its original proposal in January before broadening the review to cover non-operating companies more generally.
The potential exclusion matters because passive funds tracking MSCI benchmarks are required to hold constituent stocks.
Strategy previously warned that removal could lead to $2.8 billion worth of its shares being liquidated.
Strategy has disputed MSCI’s proposed classification. In a statement on Friday, the company said, “We believe the proposal is misguided.”
Strategy also argued that MSCI’s distinction between operating and non-operating companies was undefined and lacked a basis in US GAAP, IFRS or recognised legal frameworks.
The company said funds tracking MSCI’s Global Investable Market Indexes held just 3.1% of its outstanding shares, potentially limiting the direct impact of an exclusion.
Strategy maintains 12% STRC dividend rate
Separately, Strategy’s board declared daily cash dividends on its STRC preferred stock for each calendar day in November, subject to shareholder approval and the effectiveness of related amendments.
The annualised dividend rate will remain at 12%.
Strategy said management would continue recommending that rate until STRC demonstrates “sustained, healthy trading near $100 per share.”
Payments are scheduled to begin on November 2, with each dividend payable on the business day following its record date, according to a regulatory filing.
STRC is one of Strategy’s key fundraising instruments for Bitcoin purchases.
Daily dividend payments could help make the preferred stock more attractive to investors and support trading around its $100 par value.
STRC was down 0.2% at $99.33.
Bitcoin purchases and financing strategy in focus
Strategy added 250 Bitcoin for $21.5 million last week, bringing its total holdings to 848,250 BTC.
During the week ending October 4, the company repurchased $176 million worth of STRC, spending more than six times as much on the buybacks as on its $28 million in Bitcoin purchases.
The company introduced a capital framework on June 29 that allows it to sell Bitcoin to fund dividend payments.
It also raised STRC’s annual dividend rate to 12% at the time.
Strategy’s business model relies on raising capital through stock and debt sales to acquire Bitcoin.
While that approach has made the company a major proxy for cryptocurrency exposure in equity markets, its shares remain sensitive to financing conditions and index-related developments.
Index-related risks like MSCI’s proposed exclusion are closely watched by traders who follow stock reactions through top online trading platforms.
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