Strategy Challenges MSCI's Definition of an Operating Company

Strategy is challenging the methodology behind MSCI's new index eligibility rules, arguing that the provider has created an unclear definition of an operating company. The dispute matters because the classification can determine whether MSTR remains in widely followed global indexes.

MSCI's framework evaluates operating assets and five financial ratios rather than relying only on the share of assets held in digital currency. The provider said non-operating companies will become ineligible for its Global Investable Market Indexes with the November 2026 review.

Strategy's argument

In its formal response, Strategy said the screen relies on terms that are not defined by generally accepted accounting principles or international reporting standards. It also argued that the new test reproduces the effect of an earlier proposal aimed at digital-asset treasury companies.

The company points to its employees, software revenue and operating business as evidence that it is not simply an investment fund. It also says shares held by MSCI-linked funds represent less than one day of recent MSTR trading volume.

That liquidity comparison helps frame the likely trading impact, but it does not decide eligibility. Index providers set their own methodologies, and MSCI's objective is to distinguish operating companies from entities whose value is driven mainly by non-operating assets.

What the response can and cannot change

Strategy's letter may influence how MSCI defines thresholds, handles edge cases or phases in the rule. It does not suspend the adopted framework or guarantee that MSTR will stay in the indexes.

For shareholders, the policy question is separate from the business question. Strategy can continue operating and holding Bitcoin even if MSCI removes the stock. The near-term financial issue is whether passive selling reduces the share premium and raises the dilution cost of future capital issuance.

The next decisive evidence is MSCI's affected-company list and the final November rebalance. Until then, Strategy's response is a credible challenge to the methodology, not a resolution of the index risk.