The MSTR stock price declined by over 1.30% today, December 10, following the company’s response to MSCI regarding the proposal to exclude Digital Asset Treasury companies from indices.
Summary
- MSTR stock experienced a slight drop after Strategy’s response to MSCI.
- MSCI is currently assessing whether to delist digital asset treasury companies.
- Strategy claims that this action would be discriminatory.
Strategy, formerly MicroStrategy, fell to $185, just below this week’s peak of $197.
In a statement, the company outlined why MSCI should refrain from excluding it and similar companies from its indices. It emphasized that Strategy functions as an operating company, not an investment fund, highlighting its unique approach of using Bitcoin (BTC) to deliver returns to shareholders.
Strategy further contended that the proposed 50% digital-asset-specific threshold by MSCI is arbitrary, discriminatory, and impractical. It noted that companies in various sectors often hold concentrated assets, such as land and gold, which would not be affected by MSCI’s regulations.
Moreover, Strategy indicated that the proposal could introduce policy biases into indexing, consequently stifling innovation in the U.S. and other nations.
This statement followed MSCI’s announcement that it was evaluating the exclusion of DAT companies from its indices, suggesting these entities resemble investment funds instead of operating businesses. JPMorgan, the largest bank in the U.S., has backed this initiative.
Removing Strategy from MSCI’s indices would significantly impact the stock, as it would likely compel many funds holding the stock to sell it, adding pressure in a persistently bear market.
Prominent funds holding MSCI stock include the Vanguard Total Stock Market ETF, Invesco QQQ Trust Series 1, Vanguard Growth ETF, and Vanguard Information Technology ETF.
MSTR Stock Price Chart Analysis
The daily chart illustrates that the MSTR stock price has seen a significant decline over recent months, forming several bearish patterns that suggest a continuation of this downward trend.
Strategy has established a bearish flag pattern, characterized by a vertical line and an ascending channel. It has also created an inverse cup-and-handle pattern while remaining beneath the 50-day and 100-day Exponential Moving Averages.
Consequently, there is a risk of a bearish breakout for the Strategy stock price, with the next target projected at $150, which represents a 20% drop from the current level.
