JPMorgan increased MicroStrategy stake before index exit

JPMorgan held 36% more MicroStrategy shares at the end of September, weeks before MSCI announced it would drop the stock from its index. It also held 60% more put options, which work like insurance if the share price drops. The numbers come from a quarterly holdings report large US money managers file with regulators.

MicroStrategy is the biggest corporate holder of Bitcoin. 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 pools JPMorgan with 17 affiliates, so the lines can include client accounts and trading inventory.

Also in marketsJPMorgan raises bitcoin fund holdings to nearly $540 million

MSCI ruled that companies mostly holding assets, rather than running businesses, no longer qualify for the index. Index funds copy their index, meaning when a stock leaves, they sell whatever they think of it. JPMorgan analysts had estimated that losing the index spot could force index funds to sell about $2.8 billion of the stock.

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, as 12 of 13 tracked by TipRanks rate the stock a buy, with an average target of $217.92. The forced selling arrives Nov. 30, according to Yahoo Finance.