Strategy Inc used net proceeds from common-stock sales to finance most of a $22.1 million Bitcoin (BTC) purchase from Oct. 12 to 18, as MSCI prepares its November index review.
The company's Oct. 19 filing put its holdings at 848,517 BTC after the latest addition of 267 coins. Strategy sold 140,872 common shares. Net proceeds supplied $22 million of the purchase cost, with cash covering the remaining $100,000.
The filing also recorded $193.1 million in repurchases of STRC preferred shares. Separately, Strategy's board raised the authorization for its digital credit securities repurchase program from $2 billion to $3 billion on Oct. 19.
MSCI adopted its screen for non-operating companies on Oct. 15. The process begins by checking whether a company has substantial operating assets. Firms that fail that test are assessed against five financial ratios, and four or more flags make them ineligible for the indexes. For an existing constituent to be removed, the screen must be failed in both of its two latest annual filing periods. MSCI may also consider a newer interim filing.
An earlier EconoTimes account of MSCI's May-data simulation listed Strategy among hypothetical deletions. That exercise did not determine the company's status under the adopted screen.
An index decision concerns whether shares qualify for a benchmark; it does not require Strategy to dispose of its Bitcoin. If Strategy's share price fell, a later stock sale could raise less for additional purchases. The filing and MSCI's announcement do not establish that such a decline will happen. Strategy Executive Chairman Michael Saylor argued in an earlier interview that capital tracking MSCI indexes was too limited for removal to have much effect on the company.
The next step is MSCI's Nov. 11 publication of potentially affected constituents currently in its indexes. Any resulting changes are scheduled to take effect after the market closes Nov. 30.
