Michael Saylor's Strategy Could Be Snubbed Out of S&P 500 Again

Core Insights - A strong Q3 result from Strategy, led by Michael Saylor, is fueling discussions about the potential inclusion of its MSTR stock in the S&P 500 by the end of 2025, with a reported 70% chance of inclusion despite being overlooked in September [1][2][5] Group 1: Q3 Earnings and Market Speculation - Strategy is expected to report Q3 2025 earnings of $3.8 billion, which may reignite speculation regarding its inclusion in the S&P 500 index shuffle on December 5 [2] - The S&P 500, with a market cap of $58 trillion, undergoes quarterly reshuffles, and Strategy's performance could influence its chances for inclusion [2] Group 2: Previous Exclusion and Market Conditions - In September, Strategy was excluded from the S&P 500 despite meeting technical requirements such as a market cap over $18 billion and high liquidity [3] - The S&P Dow Jones Indices committee's discomfort with Strategy's business model, perceived as a Bitcoin fund, may have contributed to its exclusion [3] Group 3: Current Financial Standing and Ratings - Following the September decision, Strategy's MSTR stock experienced a slight decline, but the company continues to accumulate Bitcoin, holding 640,808 BTC valued at $72.3 billion [4] - The S&P has assigned a 'B-' credit rating to Strategy, citing concerns over its Bitcoin exposure, narrow business model, and low USD liquidity [4][5] Group 4: Business Model and Risks - Strategy's Bitcoin-centric business model presents both opportunities and risks; a decline in Bitcoin value could negatively impact the firm's portfolio and capital-raising capabilities [6] - The company has significant unrealized gains and tax benefits, but a substantial drop in Bitcoin could heighten leverage risks and impair access to capital [6]