Michael Saylor 🤝 Prince Harry

“You’ve been cut off!”

In news that should shock absolutely no one… Michael Saylor has found yet another financial institution that doesn't want to HODL his bags.

And sadly for Strategy shareholders, this particular institution controls which stocks trillions of dollars in passive investment funds are allowed to buy.

“It's not you, it's your entire business model.” -MSCI, presumably

Late last night while Jensen Huang was writing his resignation letter, index provider MSCI officially announced it was removing Strategy from its major stock indexes, effective November 30.

That includes the MSCI USA Index, MSCI World Index, and MSCI All Country World Index.

In other words, Saylor's beloved Bitcoin-buying machine just got served divorce papers by the very funds that have been begrudgingly funneling billions into his stock simply because an index told them to.

Saylor’s next post on Twitter *AI-generated image of himself as a lone wolf surrounded by 47 bears* “THE LION DOES NOT CONCERN HIMSELF WITH THE OPINIONS OF SHEEP.”

Meanwhile, back from whatever Ready Player One universe our Bitcoin captain lives in…

Strategy share immediately DAMPED 5%, extending a particularly fugly stretch that had already seen the stock lose more than 14% in a week.

Thoughts and prayers for my friend who put $150k into altcoins sh*tcoins thinking a crypto bull run was coming…

For those unfamiliar, MSCI operates some of the world's most widely followed stock indexes, which are tracked by enormous pension funds, ETFs, and institutional investors.

And when MSCI removes a company from one of those indexes, the funds tracking it generally have to sell their shares.

Regardless of whether they like the company.

Regardless of whether they believe Bitcoin is going to $1 million.

And regardless of how many laser eyes Michael Saylor has added to his Twitter profile.

The HODL strategy has encountered a mandatory SELL order.

According to estimates, index-tracking funds currently hold about 13 MILLION Strategy shares.

Sounds like a lot, until you realize MSTR regularly trades more than that in a single day.

So the forced selling itself might not be nearly as ugly as some Bitcoin bears are hoping.

But think about what happens AFTER those shares are sold.

Those funds aren't just dumping their positions.

They're also taking their future buying power with them.

See, since we were all wearing masks in our own homes… Strategy has been operating what can only be described as the world's most aggressive Bitcoin accumulation scheme that somehow has a Nasdaq ticker attached to it.

The genius playbook?

Issue debt.

Sell new shares.

Buy Bitcoin.

Repeat until either Bitcoin hits $1 million or the Federal Reserve starts accepting MicroStrategy preferred stock as legal tender.

And for a while, this financial perpetual-motion machine worked beautifully.

As long as Strategy shares traded at a healthy premium to the value of its underlying Bitcoin holdings, the company could issue additional stock, raise fresh capital, and purchase even MORE Bitcoin.

Which attracted more investors.

Which helped support the premium.

Which allowed Saylor to buy even MORE Bitcoin.

Infinite money glitch unlocked.

Except now, MSCI has decided they’ve seen enough of the monkey business.

Under its newly finalized non-operating company rules, MSCI examines a company's operating assets and financial ratios to determine whether it belongs in its equity indexes.

And Strategy not only failed the test.

It got kicked out without even receiving the usual two-year watchlist grace period.

And if it's any consolation to Saylor, at least he's got some fellow crypto degenerates joining him on the walk of shame.

MSCI also removed Tokyo-listed Bitcoin accumulator Metaplanet and uranium investment company Yellow Cake from its benchmarks.

Meanwhile, Ethereum treasury company SharpLink landed on the watchlist, and Upexi was removed from the MSCI USA Micro Cap Index.

Clearly, buying enormous piles of speculative assets and calling yourself a publicly traded corporation is no longer enough to impress the index committee.

And the fallout could get MUCH uglier.

Strategy warned of $2.8 BILLION in potential stock liquidations, while JPMorgan estimated $8.8 BILLION in outflows if other indexes follow suit.

With Strategy already down 25% this year versus Bitcoin's 15%, losing passive buyers could make raising money for MORE Bitcoin considerably harder.

Something another podcast tour probably isn't gonna fix.

At the time of publishing this article, Stocks.News holds positions in Strategy, Bitcoin, and Ethereum as mentioned in the article.