Bitcoin-centric Corporate Strategies (MSTR) will survive the annual reorganization that has seen several big-name companies drop out and remain in the Nasdaq 100 index.
The company, which started as business software provider MicroStrategy, pivoted to stockpiling Bitcoin as its core strategy in 2020. Since then, 660,624 BTC worth $59.55 billion has been accumulated and added to the index last December.
Unlike traditional companies included in the index, Strategy’s performance is closely tied to the price of Bitcoin. Its business model of buying and holding large amounts of cryptocurrencies has inspired similar moves by smaller companies, but has drawn criticism from analysts and index providers.
The criticism has led some analysts to argue that the company is functioning more like a Bitcoin investment vehicle than a traditional business. The Nasdaq 100 Index focuses on non-financial companies listed on the Nasdaq, so being classified as a holding company means that you are not included.
MSCI, a major index provider, has expressed concerns about crypto treasury companies like Strategy and plans to make a decision in January on whether to remove the company from its benchmarks.
Strategy, which is included in these indexes as a high-tech business intelligence company, responded to MSCI’s proposal to exclude these companies by arguing that these companies operate businesses, not investment funds.
The Nasdaq removed six companies from its index during this year’s rebalancing, including Biogen, Lululemon, and Tradedesk. Alternatives include Alnylam Pharmaceuticals, Ferrovial, and Seagate Technology. The changes will take effect on December 22nd.
