JPMorgan held 36% more MicroStrategy shares at the end of September, weeks before MSCI announced it would drop the stock. It also held 60% more put options, which work like insurance if the share price drops.
The bank’s own analysts had estimated that losing the index spot could force index funds to sell about $2.8 billion of the stock.
More Shares, and More Insurance Against a Drop
The numbers come from JPMorgan’s 13F, a quarterly holdings report large US money managers file with regulators. It landed Thursday.
MicroStrategy, now called Strategy (MSTR), is the biggest corporate holder of Bitcoin (BTC). On Sept. 30, JPMorgan held 848,932 of its shares, worth $131.3 million. In June, it held 624,387.
Its put options covered 1,148,500 shares, more than the 848,932 it held outright. In June, they covered 715,700.
The filing does not explain the mix. It pools JPMorgan with 17 affiliates, so the lines can include client accounts and trading inventory.
Why Index Funds Must Sell on Nov. 30
BeInCrypto flagged the removal risk in October, after MSCI ruled that companies mostly holding assets, rather than running businesses, no longer qualify. MSCI confirmed the US index removal on Wednesday.
Index funds copy their index. When a stock leaves, they sell, whatever they think of it.
Strategy pushed back in a letter to MSCI.
“While not material to $MSTR, the proposal is misguided, flawed, and conflicts with established securities laws and accounting principles.”
Founder and chair Michael Saylor posted on X (Twitter).
“MSCI should be a mirror of the market, not an arbiter of it.”
On Thursday, the shares fell 6% to about $115. At that price, JPMorgan’s September stake would be worth about $97.6 million, down from $131.3 million.
Wall Street analysts are not walking away. Twelve of 13 tracked by TipRanks rate the stock a buy, with an average target of $217.92.
The forced selling arrives Nov. 30. By Nov. 16, other big managers must also reveal their September holdings, showing whether others bought the stock, protection against it, or both.
