The immediate trade is the November 30 close, when index trackers have to sell. That event is well flagged and partly priced, so the reaction in the stock may come before the date rather than on it. The wider read-through is for crypto treasury companies. Metaplanet in Japan was in the same simulated deletion bucket, and SharpLink is on the watch list, so their status is worth checking as the full list circulates. For bitcoin, the concern is slower buying. Strategy has been one of the steadiest corporate buyers, and a thinner passive shareholder base could raise the cost of the equity it issues to fund purchases. If other index providers follow MSCI’s lead, that pressure would grow.---This is the big news right now ICYMI:Nvidia stock plunges after hours as New York Times reports new Jensen Huang relationship allegationNvidia CEO Huang faces 2nd relationship report as NYT links him to senior executive---MSCI has decided Strategy looks more like a bitcoin fund than a software company, and index trackers now have until November 30 to sell.Summary:MSCI will remove Strategy from its global indexes, including the MSCI USA Index, effective after the close on November 30The decision is the first under MSCI’s new non-operating company rule, which screens operating assets and five financial ratiosStrategy went straight onto the deletion list, meaning it had already failed the two-year buffer for existing index membersAnalysts estimated about $2.8 billion of passive selling, although that was calculated for MSCI’s earlier proposalStrategy says trackers hold about 13 million shares, or 3.1% of its basic shares, and Saylor calls the rule discriminatoryShares fell 0.8% after hours on Wednesday and are down about 20% this yearStrategy, the largest corporate holder of bitcoin, will be removed from MSCI’s global indexes after the index provider ruled that it more closely resembles an investment fund than an operating business. MSCI confirmed the deletion in its November index review on Wednesday. It takes effect after the close on November 30 and includes the flagship MSCI USA Index, according to Reuters and the published review list.This is the first review under MSCI’s new non-operating company rule, which was finalised in mid-October. The rule first looks at a company’s operating assets and then tests it against five financial ratios. Companies that fail at least four of the five can be ruled ineligible. Existing index members generally have to fail across two annual reporting periods before they are removed. Strategy went straight onto the deletion list rather than the watch list, which means it had already used up that buffer.The decision ends a reprieve that has lasted all year. In January, MSCI held back from excluding crypto treasury companies and promised a wider review of businesses whose main activity is holding assets. That review produced a deliberately asset-neutral test in August, but Strategy still failed it. A simulation using May data flagged Strategy, Japan’s Metaplanet and uranium holder Yellow Cake as deletions.In practice, the removal forces selling by funds that track MSCI benchmarks. Analysts have estimated that selling at around $2.8 billion, although the figure was calculated for MSCI’s earlier crypto-specific proposal. Strategy has argued the impact will be modest. It says index trackers hold about 13 million shares, roughly 3.1% of its basic shares outstanding and less than a day’s typical trading volume. Executive chairman Michael Saylor has called the rule discriminatory and argues Strategy runs a genuine software business.Strategy shares fell 0.8% in extended trading on Wednesday and are down about 20% this year, while bitcoin has lost about 15%. The bigger question is the longer term. Strategy funds its bitcoin buying largely by issuing shares, and losing part of its passive shareholder base could make that model more expensive, particularly if other index providers adopt similar rules. This article was written by Eamonn Sheridan at investinglive.com.