Michael Saylor’s Strategy has told MSCI it does not fail the index provider’s proposed exclusion screen. Its own quarterly filing shows the answer depends on where one number sits.
MSCI’s methodology flags a company when operating expenses fall below 5% of total assets. Strategy books $22.77 billion of Bitcoin fair-value change inside operating expenses, and without that line the figure falls to 0.37%.
Strategy said it has not triggered four of the five financial-ratio flags in MSCI’s proposed screen, in a letter dated August 31 signed by Executive Chairman Michael Saylor and President and Chief Executive Phong Le.
What the Letter Argues
The letter asks MSCI to withdraw its consultation on the eligibility of non-operating companies for the Global Investable Market Indexes, describing the proposal as a repackaging of a digital-asset-specific rule the index provider withdrew on January 6, 2026. That earlier proposal drew opposition from more than 250 organizations and 1,500 signatories.
Strategy states that the terms “operating” and “non-operating” appear in no US GAAP or IFRS standard and that no accounting framework, legal test, or other index provider uses the five ratios MSCI has proposed. It says MSCI has not engaged with the company in the eight months since withdrawing the first proposal.
On the screen itself, Strategy names two flags. The second applies when operating expenses fall below 5% of total assets, and Strategy says its Bitcoin impairment and unrealized losses are recorded as operating expenses and exceed that threshold on their own. The fourth applies when non-operating fair-value changes exceed 5% of total assets, and Strategy says it has reported Bitcoin fair-value changes within operating expenses in every reporting period since adopting fair-value accounting on January 1, 2025.
Filing Shows Bitcoin Inside Operating Expenses
Strategy’s Form 10-Q for the quarter ended June 30, 2026, filed on August 3, reports total assets of $52.56 billion. The filing states that changes in the fair value of Bitcoin are recognized within “Unrealized loss (gain) on digital assets” within operating expenses in the consolidated statements of operations.
Total operating expenses for the six months ended June 30, 2026, were $22.97 billion. Of that figure, $22.77 billion is the Bitcoin fair-value line. Excluding it, operating expenses were $195.4 million, or 0.37% of total assets.
The 5% threshold equates to $2.63 billion. With the Bitcoin line included, operating expenses exceed it by roughly nine times. Without it, they fall short by roughly thirteen times. The same filing states that Strategy defines its Bitcoin treasury operations as a separate reportable operating segment, following discussions with SEC staff.
The Other Flags Applied to the Same Filing
The Crypto Times applied the remaining ratios to the same filing. Digital assets stood at $49.67 billion of $52.56 billion in total assets, or 94.5%. Treated as non-operating, the remainder would be 5.5% of the total, below the 10% threshold MSCI applies to companies already in its indexes.
Net cash provided by operating activities was positive at $9.85 million, which would not trigger the operating cash flow flag. Net cash provided by financing activities was $13.77 billion, below the $15.77 billion that 30% of total assets represents for an existing index constituent, though Strategy purchased $13.67 billion of digital assets over the same period.
These figures are drawn from a six-month interim filing. MSCI applies its screen to annual filings and simulated its results on May 2026 data, and the index provider does not disclose which ratios each company failed. A full-year measurement would produce different cash-flow figures against the same asset base.
Strategy Accounts for 87% of the Capital Affected
Per MSCI’s consultation document, the proposal would delete three companies from an index of thousands and place three more on a public watchlist. Strategy’s float-adjusted market capitalization is $23,931 million against $3,618 million for the other five companies combined, the basis for the roughly 87% figure the letter cites.
The Crypto Times reported the deletion list on August 14, with London-listed uranium holder Yellow Cake at $1.81 billion and Japan’s Metaplanet at $654 million. The letter names Weyerhaeuser, Dominion Energy, Universal Music Group, and Burford Capital as asset-concentrated companies the proposal would spare.
Strategy describes itself as an operating business with approximately 1,500 employees worldwide and an enterprise analytics software segment generating close to half a billion dollars in annual revenue. It held approximately 846,000 Bitcoin at June 30, 2026, at a cost basis of $63.94 billion against a fair value of $49.67 billion.
Feedback Closes September 30
MSCI is accepting feedback through September 30, 2026, and expects to announce results on or before October 16, with any changes proposed for implementation in the November 2026 Index Review.
If MSCI proceeds, Strategy asks that the test apply only to filings issued after implementation, that the consultation record be published with reasoned responses, and that MSCI place a legal hold on documents relating to the development, purpose, and issuance of the final test. The letter also raises the SEC’s open question on whether index providers are investment advisers and MSCI’s obligations as an EU-registered benchmark administrator.
Strategy submitted a response to the earlier consultation on December 10, 2025, and Bitwise wrote to MSCI two days later, arguing indexes should reflect market composition rather than assess business models.
