Strategy Retails Spot In The NASDAQ 100, Why This Is Noteworthy

Key Insights

• MSCI review rules in favor of Strategy remaining in the NASDAQ 100. Here’s why this is important, especially from an allocation point of view.
• Walking the fine line between innovation and speculative investment: The determining factor for Strategy’s position in the NASDAQ 100.

The last 7 days have been quite interesting for Strategy and its MSTR stock, which experienced a social activity surge.

One of those reasons was that the stock was at risk of being pulled from the NASDAQ 100 index.

MSTR stock previously faced criticism over its bearish performance over the last few months, but it recently experienced some relief from the bears.

A recent investigation into potential price manipulation also highlighted the shifting tide for Strategy.

The company just scored a major win after global index provider MSCI decided to retain the MSTR stock in the NASDAQ 100 index.

This was courtesy of the MSCI’s annual review of the index, meaning Strategy stock will continue being part of the NASDAQ 100 for the next 12 months.

The MSTR stock previously faced heavy scrutiny, with rumors suggesting that it would be removed from the index.

What MSCI’s Decision Means for the MSTR stock

Most of the criticism Strategy has faced regarding MSTR stock stemmed from its heavy exposure.

The index primarily focuses on non-financial companies, and analysts have questioned whether its focus on BTC could disqualify it.

There was still some ambiguity around the stock even though the MSCI has decided that MSTR stock should rejoin the index for another 12 months.

The global index provider reportedly plans to review whether Strategy and other companies with similar business models should be part of the NASDAQ indexes.

Nevertheless, the new 12-month lease on the NASDAQ 100 may offer some advantages. For starters, it may offer reassurance to investors hence boosting confidence.

The MSTR stock’s exposure to the NASDAQ 100 index may benefit it in terms of liquidity allocation.

This is because such indices attract specific types of investors, such as hedge funds and retirement funds. The kind of investors who seek long-term exposure.

The extended listing on the NASDAQ 100 suggests that MSTR stock may receive more visibility, which could, in turn, fuel positive liquidity flows.

Will the Speculative Nature of Crypto Haunt Strategy?

The fact that MSCI is contemplating a review of Strategy and other similar companies with crypto exposure means MSTR stock’s foundation on the index may still be shaky.

Critics have been weighing down on the stock’s presence in the index due to crypto’s speculative nature.

On the plus side, the MSCI’s confirmation of MSTR as a NASDAQ 100 stock was timely, considering the stock’s performance.

The stock recently found support near the $166 price level, followed by noteworthy accumulation.

While it appears that MSTR has been pushing for presence in the NASDAQ 1000, an alternative school of thought is that mainstream demand requires its presence in the index.

Some analysts have predicted that Bitcoin could rally to $1 million and above. Tom Lee believes that MSTR could become one of the most valuable companies in the world if Bitcoin clocks the $1 million milestone.

While these expectations have investors excited about MSTR stock price prospects, the market remained concerned about the impact of BTC’s declining price action.

MSTR stock price hovered at $176 at press time, while Bitcoin exchanged hands at $90,381.

The market is currently waiting to establish directional footing next week, courtesy of Japan’s central bank, which is slated to make an interest rate decision.