MSTR Stock Faces MSCI Removal Risk, But Market Has Adjusted
Matt Hougan, Chief Investment Officer of Strategy, believes the company will maintain its Bitcoin reserve even if its MSTR stock is removed from major MSCI indexes. Hougan explained that the market has already priced in the risk of this event, as evidenced by MSTR’s stock performance following JPMorgan’s announcement about the classification of digital asset treasuries (DAT).
According to Hougan, there is a high likelihood around 75% that JPMorgan will remove MSTR from its MSCI index list on January 15, 2026. This decision could trigger index-linked funds to sell off up to $2.8 billion in MSTR shares. However, Hougan suggests that the market has largely adjusted to this scenario, making significant price changes unlikely.
He emphasized that the primary factor determining MSTR’s value is not its index status but the execution of its strategy moving forward.
MSTR Stock Performance and Market Adjustment
Hougan pointed out that the stock’s price reaction since JPMorgan’s October announcement indicates that investors have already factored in the risk of forced selling due to the potential exit from the MSCI index. The removal from the index would likely lead to a significant sell-off, but Hougan believes that the impact on MSTR’s long-term valuation would be limited as it relies more on its execution rather than its index status.
In terms of financial stability, Hougan reassured that MSTR is unlikely to need to liquidate its Bitcoin holdings. He noted that the company has substantial cash reserves, including $1.4 billion, which should comfortably cover its dividend payments and other obligations for the foreseeable future.
MSTR’s annual interest payments on its debt, approximately $800 million, are also not a pressing concern at this time, further reducing the likelihood of any drastic financial moves.
Despite ongoing concerns about a potential selloff, Hougan expressed confidence in Strategy’s position. He emphasized that while the MSTR stock faces challenges, the company’s financial health and its ability to execute its strategy should be the primary focus for investors.