In a surprising turn of events, Strategy’s (formerly MicroStrategy) stock, MSTR, faced a 2.9% drop after failing to secure a spot in the prestigious S&P 500 Index. The announcement was made on September 5th, and instead of MSTR, Robinhood was selected to join the coveted index.
What Led to MSTR’s Exclusion?
Despite meeting all the required criteria, including liquidity and profitability over the last four quarters, MSTR was overlooked. Analysts have speculated that the mysterious committee responsible for the final decision ultimately voted against its inclusion. According to a Bloomberg ETF analyst, “Why wasn’t $MSTR allowed into the S&P 500 Index despite meeting all the criteria? Because the ‘Committee’ said no.”
Community Reactions and Future Predictions
The crypto and investment community have been divided about MSTR’s chances of making it into the index at the next rebalancing session in December. While some remain pessimistic, others, like CoinDesk analyst James Van Straten, are optimistic. Van Straten compared this situation to Tesla’s earlier journey to the S&P 500, stating, “December it is for MSTR, same setup as Tesla.” If included, MSTR’s entry into the index could potentially amplify institutional investor interest and benefit ETFs aligned with the cryptocurrency-focused company.
CEO Michael Saylor’s Subtle Response
Michael Saylor, Strategy’s founder, indirectly addressed the situation on X (formerly Twitter) by highlighting a comparison of MSTR’s and Bitcoin’s annualized returns against the S&P 500 Index (SPY). His post emphasized the outperformance of both MSTR stock and Bitcoin over SPY, further underscoring the investment potential of his firm.
Nasdaq and Regulatory Challenges
Adding another layer of complexity, Nasdaq’s new proposal, which aims to require shareholder approvals for crypto treasury capital raises, stirred concerns. Analysts suggested this could hinder crypto-focused companies, but Strategy clarified that the directive would not affect its capital plans. In an official statement, the firm assured stakeholders that “Nasdaq’s new position on digital asset treasury formations doesn’t affect Strategy, our ATMs, or our other capital markets activities.”
Where MSTR Stands Now
As of now, Strategy holds 636,505 Bitcoin, having recently added 4,000 BTC to its reserves. However, compared to its aggressive buying earlier in the year—particularly in July when it acquired 21,000 BTC—its purchasing pace has noticeably slowed during the latter half of Q3. Market watchers continue to keep a close eye on Strategy, noting that any further developments could significantly influence the cryptocurrency market.
Invest in Your Financial Future
If you’re exploring opportunities in cryptocurrency, Robinhood, which recently made it into the S&P 500, offers accessible and user-friendly options for buying and selling crypto assets. Learn more about their services here.
Stay tuned for more updates on Strategy’s potential inclusion in December and the evolving state of the financial markets.
