Shares of Strategy (MSTR) surged 6 percent in pre-market trading on Wednesday, January 7, 2026. The catalyst was a late-Tuesday announcement from index provider MSCI, which stated it would not, for the time being, exclude Digital Asset Treasury Companies from its global benchmarks. This decision removes an immediate threat that could have forced institutional investors to divest their holdings in the world’s largest corporate Bitcoin holder.
A Critical Reversal of Course
On January 6, MSCI justified its reversal, citing a need for “further research and consultation” to distinguish between traditional investment firms and companies that hold digital assets as part of their core business operations. Consequently, a planned index review scheduled for February 2026 will not proceed.
This development follows Strategy’s vigorous opposition in December 2025. The company had issued a sharply worded letter criticizing the proposed exclusion as “discriminatory, arbitrary, and unworkable,” emphasizing that it operates as an active business, not a passive investment fund.
Analysts at J.P. Morgan noted the outcome: “For now, MSCI is maintaining the current index treatment for DATCOs with digital assets representing 50 percent or more of total assets.”
Analysts Urge Caution Despite Relief
While Wall Street reacted with relief, analysts cautioned against premature celebration. Lance Vitanza, an analyst at TD Cowen, framed the situation starkly: “What remains to be seen is whether this represents a victory for the defense or merely a stay of execution.” Vitanza maintained his $500 price target and buy rating on the stock.
The most bullish voice, Benchmark analyst Mark Palmer with a $705 price target, called it a “welcome breather.” However, he added a significant caveat: “MSCI’s decision to consider excluding non-operating companies from its indices means this episode is not over.”
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Mike O’Rourke, a strategist at JonesTrading, anticipates MSCI will launch a broader consultation on non-operating companies, suggesting the exclusion has merely been “pushed back to later in the year.”
Relief Arrives Amid a Challenging Backdrop
The positive news arrives at a critical juncture for Strategy. On January 5, the company reported an unrealized loss of $17.44 billion on its Bitcoin holdings for the fourth quarter of 2025, a period during which Bitcoin’s price fell approximately 25 percent. This contrasts sharply with the $3.9 billion unrealized gain reported for the third quarter.
Strategy holds 673,783 Bitcoin, valued at roughly $62 billion, representing over 3 percent of the total BTC supply. With a market capitalization of about $47 billion, the stock now trades at a discount to the value of its Bitcoin treasury, a notable shift from its previous premium valuation.
To address concerns regarding its debt load, Strategy has built a $2.25 billion cash reserve, funded through equity sales. Market experts are closely monitoring the company’s $5 billion in convertible notes, which mature in 2028.
Preferred Shares Rebound
In a related move, Strategy’s preferred shares (STRC) returned to their $100 par value in pre-market trading on Wednesday for the first time since early November. These securities pay an annual dividend of 11 percent. Trading at par enables the company to issue new shares to finance additional Bitcoin acquisitions.
While the MSCI decision provides Strategy with crucial breathing room, the fundamental issue remains unresolved. The index provider plans a more comprehensive consultation on the treatment of non-operating companies. The final outcome could still impact Strategy and the growing cohort of similar Bitcoin treasury firms.
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