Saylor’s Strategy Faces Index Exclusion Amid $8 Billion Potential Outflows

Michael Saylor's firm, previously MicroStrategy, is heavily impacted by the current cryptocurrency downturn, with over $1 trillion wiped out from the market recently.

The company holds over 650,000 Bitcoins, risking removal from key indices like MSCI USA and Nasdaq 100, crucial for visibility in mainstream portfolios.
JPMorgan analysts warn of potential passive outflows between $2.8 billion and $8.8 billion if index exclusions proceed, affecting nearly $9 billion in market exposure.
MSCI considers excluding firms with digital assets comprising over 50% of total assets from global indexes, impacting Strategy's business model.
Strategy's shares have declined over 60% since last November, diminishing investor confidence despite a historical 1,300% increase since August 2020.
Recent funding structures face challenges: perpetual preferred shares decline, and yields on securities rise to 11.5%. A euro-denominated offering fell below its discounted price.

The collapse in premium and increased funding costs make capital raising challenging, according to Michael Youngworth from Bank of America Global Research.