MicroStrategy Incorporated d/b/a Strategy (NASDAQ: MSTR) Securities Fraud Class Action

LEAD PLAINTIFF DEADLINE IS JULY 15, 2025.

If you have suffered losses and would like to discuss your rights, please fill out this form or you may contact Jonathan Naji, Esq. at (484) 270-1453 or via e-mail at info@ktmc.com.

Case Background:
A class action lawsuit was filed on behalf of those who purchased or otherwise acquired MicroStrategy Incorporated d/b/a Strategy (“Strategy”) (NASDAQ: MSTR) securities between April 30, 2024, and April 4, 2025, inclusive (the “Class Period”). 
Strategy, together with its subsidiaries, provides enterprise analytics software and services purportedly powered by artificial intelligence.  Since 2020, the company has increasingly focused on purchasing and holding bitcoin, a type of crypto-currency, as a long-term business strategy.  In October 2023, this strategy became so central to Strategy's operations that it began referring to itself as a "Bitcoin Treasury Company" that primarily uses proceeds from equity and debt financings, as well as cash flows from its operations, to accumulate bitcoin, which serves as its primary treasury reserve asset.

Strategy, together with its subsidiaries, provides enterprise analytics software and services purportedly powered by artificial intelligence.  Since 2020, the company has increasingly focused on purchasing and holding bitcoin, a type of crypto-currency, as a long-term business strategy.  In October 2023, this strategy became so central to Strategy's operations that it began referring to itself as a "Bitcoin Treasury Company" that primarily uses proceeds from equity and debt financings, as well as cash flows from its operations, to accumulate bitcoin, which serves as its primary treasury reserve asset.

The Class Period begins on April 30, 2024. The day before, on April 29, 2024, during after-market hours, Strategy issued a press release announcing its financial results for the first quarter of 2024 (the “1Q24 Earnings Release”). The 1Q24 Earnings Release reported that “[a]s of March 31, 2024, the carrying value of the Company’s digital assets (comprised of approximately 214,278 bitcoins) was $5.074 billion, which reflects cumulative impairment losses of $2.461 billion since acquisition[.]” Notwithstanding these losses, the 1Q24 Earnings Release assured investors that “We believe that the combination of our operating structure, bitcoin strategy, and focus on technology innovation provides a unique opportunity for value creation for our shareholders. Year to date, the price of bitcoin appreciated significantly, spurred notably by the approval of the spot bitcoin exchange traded products which has increased institutional demand and resulted in further regulatory clarity[.]” That same day, during after-market hours, Strategy hosted a conference call with investors and analysts wherein Strategy discussed at length the purported benefits of the company’s bitcoin-focused investment strategy, while also representing that bitcoin’s volatility served as a major boon to Strategy’s success. 

Throughout the Class Period, Strategy consistently touted the company's bitcoin-focused investment strategy and treasury operations.  Strategy also introduced several new key performance indicators ("KPIs")—namely, "BTC Yield," "BTC Gain," and "BTC $ Gain"—to measure its financial results.  According to Strategy, these new KPIs would help the market assess the company's strategy of acquiring bitcoin in a manner accretive to shareholders.

On January 1, 2025, Strategy adopted a provision of the Financial Accounting Standards Board's ("FASB") Accounting Standards called ASU 2023-08 which requires publicly traded companies to measure their crypto assets at fair value in their financial statements, with gains and losses from changes in the fair value of those assets recognized in net income in each reporting period.  The FASB issued ASU 2023-08 to improve the way that companies account for their crypto assets and, accordingly, require them to provide a more accurate assessment of the fair value of those assets.  Prior to its adoption of ASU 2023-08, rather than employing a fair value accounting methodology, Strategy accounted for its bitcoin under a cost-less-impairment accounting model, whereby the company classified its large bitcoin holdings as intangible assets.  Under this accounting model, Strategy only needed to recognize impairments in the event of price depreciations and would not mark up for price increases unless the assets were sold.

On April 7, 2025, during pre-market hours, Strategy disclosed in a filing with the SEC that, following its adoption of ASU 2023-08, the company recognized a $5.91 billion unrealized loss on its digital assets for the first quarter of 2025, which was expected to result in a net loss for the quarter.  As a result, Strategy warned investors that "[w]e may not be able to regain profitability in future periods, particularly if we incur significant unrealized losses related to our digital assets."  On this news, Strategy's Class A common stock price fell $25.47 per share, or 8.67%, to close at $268.14 per share on April 7, 2025.

The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding Strategy's business, operations, and prospects.  Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (1) the anticipated profitability of Strategy's bitcoin-focused investment strategy and treasury operations was overstated; (2) the various risks associated with bitcoin's volatility and the magnitude of losses Strategy could recognize on the value of its digital assets following its adoption of ASU 2023-08 were understated; and (3) as a result, Defendants' public statements were materially false and misleading at all relevant times.
 

What is a Lead Plaintiff?

A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.