MicroStrategy Buys Bitcoin in Trouble? 5 Class Action Lawsuits Accuse Strategy Investments of Including "False Statements"

According to a report by Benzinga on June 27, since May 16, at least five securities fraud class action lawsuits have been filed against MicroStrategy, accusing management of making "materially false and misleading statements" regarding the returns and risks of Bitcoin investments between April 30, 2024, and April 4, 2025. (Background: Understanding the essence of MicroStrategy's "crazy Bitcoin buying": it's an arbitrage business) (Additional context: MicroStrategy spent another $26.1 million to increase their position, with Bitcoin holdings approaching 600,000 coins, how much cash do they have left to buy BTC?) Long-term supporter of Bitcoin (BTC), MicroStrategy (formerly MicroStrategy), despite holding a large amount of coins and gaining over tens of billions of dollars in unrealized gains, saw its stock price soar to $100 billion. However, according to Benzinga's report on June 27, since May 16, at least five securities fraud class action lawsuits have been filed against MicroStrategy, accusing management of making "materially false and misleading statements" regarding the returns and risks of Bitcoin investments between April 30, 2024, and April 4, 2025. The lawsuits focus on Bitcoin financial reports. MicroStrategy's first quarter financial report revealed an unrealized loss of nearly $6 billion, with a net loss per share of $16.49, causing the stock price to drop nearly 9% on the day the news was released. Plaintiffs claim that MicroStrategy downplayed Bitcoin's fluctuations and failed to fully explain the impact of the new accounting standard ASU 2023-08 on the company's earnings. The list of defendants includes not only MicroStrategy itself but also Executive Chairman Michael Saylor, CEO Phong Le, CFO Andrew Kang, and some directors. Notably, multiple law firms have filed complaints simultaneously, aiming to become the "lead plaintiff's attorney" after the cases are consolidated. University of Colorado professor Ann Lipton pointed out that this is common practice in the industry; University of Michigan professor Adam Pritchard added that under the Private Securities Litigation Reform Act of 1995, courts typically select the investors with the largest losses to serve as lead plaintiffs, and the responsible law firms can receive high fees. As a result, firms such as Pomerantz LLP and Bronstein Gewirtz & Grossman have issued press releases reminding investors to file their claims before July 15, 2025. MicroStrategy holds nearly 600,000 coins. According to the latest data from Bitcoin Treasuries, MicroStrategy currently holds 592,345 Bitcoins, with an average purchase cost of about $95,000. Although its unrealized gains turned to losses when Bitcoin's price briefly fell to $82,000 in the first quarter of this year, the price has now rebounded above $106,000, allowing MicroStrategy's holdings to regain profitability. However, plaintiffs still accuse MicroStrategy of overstating long-term returns and underestimating short-term market fluctuations. The market is also concerned that ASU 2023-08 requires immediate reflection of fair value, meaning any future price drop will amplify earnings fluctuations, and if information disclosure is inadequate, similar lawsuits may arise again. MicroStrategy's stance? Strategy stated in an 8-K filing submitted to the SEC: "The company will vigorously defend itself, and it is currently not possible to reasonably estimate the outcome of the litigation." The same document indicated that MicroStrategy will continue to increase its Bitcoin holdings as planned. The cases will be consolidated for trial after the court selects the lead plaintiff, and the outcome remains to be seen. Related reports include MicroStrategy's Michael Saylor stating: Apple should invest in BTC, as it would better stimulate stock prices than repurchasing Apple stock. MicroStrategy replied to "Bitcoin quantum attack," with Michael Saylor saying: "It's a baseless fear; if it were true, Google and Microsoft would fail first." MicroStrategy's Michael Saylor tagged internet celebrity Joe Rogan: "Let's talk about Bitcoin!" This article was originally published in BlockTempo, the most influential blockchain news media.