Strategy not included in the S&P 500! Analyst: Similar to Tesla and Facebook's experience in the US stock market back then.

The American software company Strategy (MSTR) has recently transformed into a corporate-level Bitcoin asset management giant, holding over 638,000 BTC with a market capitalization exceeding $94 billion. However, in the latest quarterly adjustment of the S&P 500 index, Strategy, despite meeting all financial and market capitalization standards, was still excluded, sparking discussions among analysts about "Bitcoin bias", comparing it to the experiences of Tesla (TSL) and Facebook (Meta) in previous years.

Standard Compliant but Rejected: Bitcoin Holdings in Focus

(Source: The Block)

Benchmark analysts pointed out that MSTR meets the standards in terms of finance, market capitalization, and liquidity, but its large Bitcoin holdings and extremely high profit and loss volatility may deter the index committee.

Bitcoin Sensitivity: MSTR's earnings situation is "abnormally sensitive" to BTC price fluctuations, potentially leading to billions of dollars in GAAP volatility.

Source of funds: 92% of the latest acquisition funds come from common stock issuance, while only 8% come from preferred stock.

Market impact: Not being included in the index means that it cannot benefit from passive capital inflows in the short term.

Historical Precedent: TSL and Facebook's 'Delayed Entry'

Analysts compared this event with several well-known cases from the past:

TSL: Unexpectedly excluded in September 2020, it was included two months later.

Facebook (Meta): Became a market capitalization giant after its IPO in 2012, but due to governance and voting rights structure issues, it was not selected until December 2013.

Robinhood: Excluded last summer as well.

Benchmark believes that these cases show that initial rejections are often related to volatility, governance, or industry positioning, rather than permanent disqualification.

Analyst Perspective: Adaptation Issues of Bitcoin Patterns

TD Cowen analysts pointed out that MSTR's accumulation of Bitcoin is far outpacing its debt growth, and Bitcoin is increasingly integrating into the global financial system.

Analysts mentioned: "We believe that the trading price for Strategy should be higher than the intrinsic value of Bitcoin, which is an obvious bias for us."

They rated MSTR as "Buy" with a target price of $640, emphasizing that inclusion in the index has never been the core of the investment argument.

Benchmark speculates that the committee may still be "calibrating" which crypto-related business models are suitable for long-term inclusion in the benchmark.

Conclusion

The rejection of the Strategy highlights the cautious attitude of traditional financial indices towards Bitcoin as a core asset. History shows that TSL and Facebook eventually entered the S&P 500, and MSTR may just be a matter of time. Before that, the company will continue to focus on its Bitcoin accumulation strategy and maintain its unique positioning between institutional investors and the crypto market.