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Michael Saylor’s Strategy missed out on inclusion in the S&P 500 this Friday, sending MSTR tumbling almost 3% despite meeting every published criterion. Unexpectedly, commission-free trading app Robinhood was included, sending its stock soaring by 7%, and exposing how discretionary and secretive the selection process really is.
The SPX is run by a ‘secret committee’
The S&P 500 is often seen as the gold standard of U.S. corporate prestige, a club that companies fight hard to join.
Strategy comfortably checked all the boxes: strong market cap, liquidity, and four consecutive quarters of positive earnings. Many investors expected the company’s Bitcoin-heavy balance sheet (now over 636,000 BTC) would finally land it a coveted spot.
But as Boomberg ETF analyst Eric Balchunas pointed out on X, meeting the criteria isn’t enough:
“Why wasn’t $MSTR allowed into the S&P 500 Index despite meeting all the criteria? Because the ‘Committee’ said no. You have to realize SPX is essentially an active fund run by a secret committee.”
This “Committee” is not public. Its members are senior analysts from S&P Dow Jones Indices, but their identities are withheld to avoid lobbying and outside influence. The reality is that even after meeting strict metrics, final entry is a matter of human discretion, not a rules-based process. The Bitcoin Therapist said it best:
“Reminder that a company that literally sells a shitcoin called ‘Fartcoin’ with a treasury of 11,776 BTC was included in the S&P 500 but Strategy, a Bitcoin only company with a treasury of 636,505 BTC and the largest fixed income IPOs of the year was not included.”
Strategy is the largest corporate Bitcoin holder and has become a proxy for BTC exposure on U.S. financial markets. Its omission has sparked frustration among crypto advocates and traditional investors alike, who believe old-guard prejudice is still alive and well inside the committee room.
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Why was Strategy blocked?
There is no published reasoning for S&P 500 exclusions, just as Tesla saw unexplained delays years before its own eventual inclusion. As Eric Balchunas posted:
“Would be interesting to see a list of all the stocks that were delayed entrance to SPX by The Committee, I know it would include some real studs, eg Microsoft, Tesla. Would be interesting to see a basket of those stocks vs SPX itself historically.’
Strategy’s unique reliance on Bitcoin for corporate treasury and market value is unprecedented. Traditional committee members may be wary of this new type of public equity.
Moreover, volatility concerns persist. MSTR moves with Bitcoin, which exposes the index to greater swings than most conventional stocks.
Strategy’s exclusion means S&P 500 index funds won’t be forced to buy its shares, limiting automatic passive flows and keeping BTC exposure out of the default retirement portfolios of millions.
The case lifts the veil on the S&P 500’s true nature, which is more actively curated than most investors realize, and far less transparent than its reputation suggests.
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