Analysts flag risks for Strategy at Nasdaq 100 index reshuffle

Core Viewpoint - Strategy, a major player in Bitcoin investment, faces potential removal from the Nasdaq 100 index due to concerns over its business model and share price performance [1][4]. Group 1: Company Overview - Strategy, originally a software company (MicroStrategy), transitioned to Bitcoin investing in 2020 and reached a market capitalization peak of $128 billion earlier this year [2]. - The company reported a net profit of $2.78 billion for the three months ending September 30, a significant turnaround from a loss of $340.2 million a year earlier, primarily due to an accounting change that allowed it to recognize gains on Bitcoin holdings [3]. Group 2: Market Performance and Concerns - Strategy's shares have declined by 65% from their 2024 peak and 36% year-to-date, contrasting with a 3.6% drop in Bitcoin this year [7]. - The company's market value has decreased to $52.7 billion, while its Bitcoin holdings are valued at over $61 billion [7]. Group 3: Nasdaq 100 Index Implications - The Nasdaq 100 index is undergoing an annual reshuffle, which could impact companies like Strategy that are sensitive to market capitalization changes [4][6]. - Analysts have raised questions about whether Strategy should be classified as a holding company or a cryptocurrency company, which could influence its inclusion in the index [4].