In recent developments, Strategy Inc., formerly known as MicroStrategy, is embroiled in multiple class-action lawsuits alleging significant misrepresentation regarding its Bitcoin investments. Shareholders argue that the firm concealed critical risks associated with its crypto portfolio, leading to substantial financial turmoil.
The allegations are centered around approximately $6 billion in unrealized losses, spanning from April 2024 to April 2025. With the stakes high, the legal landscape has become increasingly complex as various parties seek justice.
Claims and Legal Implications
Legal documents indicate that executives allegedly issued false and misleading statements regarding Bitcoin’s volatility and a newly mandated accounting policy, which requires the company to report its digital assets at current market values.
Among the principal plaintiffs, Abhey Parmar asserts that the leadership failed to uphold their responsibilities, overselling the company’s prospects amidst Bitcoin’s emerging volatility. There is fierce competition among law firms looking to represent affected investors, indicative of the significant financial consequences involved.
Strategy Inc. faces at least five class action lawsuits centered on $6 billion in unrealized Bitcoin losses, alleging misleading statements on the firm’s financial health. Legal experts highlight that such competing actions often arise in high-stakes financial disputes.
— Crypto Insight (@CryptoInsight) June 27, 2025
Investigating Executive Transactions
Concerns over internal dealings have arisen, particularly regarding transactions led by CEO Phong Le and CFO Andrew Kang, who liquidated around $32 million in stock ahead of the public announcement related to the accounting policy change.
This timely selling raises suspicions about whether executives were aware of the upcoming financial impact. If they delayed disclosing crucial information until after their transactions, it could significantly bolster the case against them.
Profit Forecasts and Investor Reaction
In a troubling forecast, Strategy announced in April that it would not achieve profitability in Q1, citing unrealized Bitcoin losses. The company reported a loss of $16.49 per share, warning investors that a turnaround might not be in sight.
This announcement spurred the first lawsuit, initiated on May 16 by Pomerantz LLP, quickly followed by others from prominent law firms seeking to represent affected shareholders. The rising tide of legal action highlights the mounting concerns for investors.
Financial Metrics Amid Legal Challenges
Despite these legal challenges, Strategy’s stock has risen nearly 30% this year. Currently, the company holds 592,345 BTC valued at over $63 billion.
Purchasing Bitcoin at an average price of $70,702 per coin, the current market price of around $106,824 presents an unrealized gain of about $21.3 billion, roughly a 50% increase. This profitability could explain why many investors continue to support the company’s strategy.
Institutional Holdings and Market Confidence
Looking at recent SEC filings, founder Michael Saylor stands out as the largest shareholder, holding nearly 20 million shares valued at around $8 billion at the current share price of $389.50.
Other significant institutional investors include Vanguard at 8.55%, BlackRock at 5.80%, Capital International Investors at 5.80%, and others, all indicating a strong backing from the investment community.
Currently trading at approximately $393.24, Strategy holds a market valuation close to $107.50 billion, reflecting a premium over its net asset value.
Image sourced from Unsplash, chart data from TradingView.
