Can Michael Saylor’s Strategy Ever Join the S&P 500?

Earlier this week, the Bitcoin treasury company was snubbed again, with Sandisk joining the ranks of America’s most prestigious large-cap companies instead.

During an earnings call for its Q2 results in October, Strategy executives wanted to make one thing clear: they are ready to compete in the big leagues.

President Phong Le argued that the company was on track for operating income of $34 billion by the end of the year, easily surpassing the likes of Walmart and Pfizer.

Here is the problem, however: a committee can veto inclusion even if all of these requirements are met. That is the situation Strategy currently finds itself in, much to the frustration of executives.

Strategy’s current chances may have taken a hit. In the month that has passed since this earnings call, its stock has plunged by a further 35%. This has left the business with a market capitalization of $50.9 billion, a valuation that is lower than the $58 billion worth of Bitcoin it holds.

Millions of investors saving for their retirement might also prefer for this stock to remain excluded indefinitely. While Strategy’s share price has been known to surge dramatically when Bitcoin is in the ascendancy, punishing drawbacks are also a threat. Would everyday consumers want this in their portfolio?

For now, Strategy is trying to put a brave face on its current financial position, stressing that it would not be plunged into jeopardy if BTC’s spot price falls below the average of $74,000 it has paid per coin.

“In the depths of the 2022 crypto winter, our average cost basis was $30K while $BTC traded nearly 50% below it at $16K. What did we do? We bought more.”

Executive chairman Michael Saylor has also insisted that Strategy “is not a fund, not a trust and not a holding company”, issuing a statement amid rumors that the stock could be ejected from the MSCI index.

It is unclear whether that will be enough to convince decision makers on Wall Street.