MSTR’s share price fell more than 1.30% today, December 10, when the company published its response to MSCI on the proposal to exclude digital asset treasury companies from indices.
Summary
- MSTR shares fell slightly after Strategy responded to MSCI.
- MSCI is considering delisting digital asset treasury companies.
- Strategy maintains that such a measure would be discriminatory.
Strategy, formerly known as MicroStrategy, fell to $185, a few points below this week’s high of $197.
in a statementthe company explained why MSCI should not exclude it and other similar companies from its indices. He maintained that Strategy was an operating company and not an investment fund. Its main difference with other firms is that it has decided use bitcoin (btc) to generate profitability for its shareholders.
Strategy also argued that the 50% threshold specific to digital assets that MSCI proposed was arbitrary, discriminatory and unworkable. He pointed to companies in other industries that have concentrated their holdings in a single type of asset. For example, some companies have accumulated large assets, such as land and gold, that will not be affected by MSCI rules.
Additionally, Strategy argued that the proposal will inject political considerations into indexing and stifle innovation in the United States and other countries.
The statement came after MSCI said it was reviewing whether to exclude DAT companies from its indices. He maintains that these companies are more like investment funds than operating companies. JPMorgan, the largest US bank, has supported the measure.
A move to remove the strategy from MSCI indices would have a major impact on the stock. For one, it would force most of the funds that own the stock to sell them, creating more pressure at a time when they are caught in a bear market.
Some of the top funds that hold MSCI shares are 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 shows that the MSTR stock price has seen a sharp free fall in recent months. It has formed some bearish patterns, which points to a continuation of this decline.
The strategy has formed a bearish flag pattern, which is composed of a vertical line and an ascending channel. It also formed an inverse cup and handle pattern and remains below the 50-day and 100-day exponential moving averages.
Therefore, there is a risk that the Strategy’s share price has a bearish breakout, with the next target at $150, down 20% from the current level.
