Strategy Inc. Faces Potential Index Exclusion and Billions in Forced Selling

A critical warning from global banking giant JPMorgan has triggered a severe sell-off in shares of Strategy Inc., the company formerly known as MicroStrategy. Investors are fleeing the stock amid growing panic over a scenario that threatens the equity's very structure: a potential expulsion from the world's most significant stock market indices.

The stock is caught in a vicious downturn, pressured not only by broader market weakness but also by a fundamental threat to its standing. The primary driver behind the recent plunge is a stark analysis from JPMorgan strategists. They highlight a substantial risk that Strategy Inc. will be removed from key MSCI indices during the upcoming review scheduled for January 15.

The rationale is technical but carries immense consequences. New regulations may exclude companies where digital assets constitute more than 50% of total assets—a threshold Strategy Inc. has dramatically surpassed due to its aggressive acquisition of Bitcoin.

The Liquidity Crisis Looming

An official exclusion by index provider MSCI would have dire implications for the stock's liquidity. Passively managed funds that track these indices would be compelled to immediately divest their holdings. JPMorgan has quantified the potential fallout:

Should investors sell immediately? Or is it worth buying Strategy?

• Immediate Selling Pressure: An estimated $2.8 billion worth of shares would need to be liquidated by funds mirroring MSCI indices.
• Contagion Risk: Should other major index providers follow MSCI's lead, total outflows could balloon to as much as $8.8 billion.
• Reputational Damage: Removal from major indices would severely restrict access to institutional capital and drive up the company's future financing costs.

Bitcoin's Slide Compounds the Problem

This precarious situation is exacerbated by a struggling cryptocurrency market. With Bitcoin trading approximately 30% below its October peaks, the core pillar supporting Strategy Inc.'s valuation is crumbling. The market no longer values the firm primarily as a software entity but almost exclusively as a leveraged vehicle for Bitcoin exposure.

This shift in perception is starkly reflected in the share price. Just yesterday, the stock hit a fresh 52-week low of 153.80 euros. Over the past 30 days alone, the equity has shed more than 36% of its value and is now in a desperate search for a price floor.

The company's rebranding from MicroStrategy to "Strategy Inc." in August 2025 has failed to resolve this fundamental identity crisis. As long as fears of an index exclusion persist and the crypto market fails to stage a sustained recovery, the path of least resistance for Strategy Inc.'s shares remains downward.