Shamis & Gentile, P.A. is investigating potential stockholder claims on behalf of long-term shareholders of Strategy, Inc. (formerly MicroStrategy, Inc.) (“Strategy” or the “Company”) (MSTR) against certain of its directors and officers for breaches of fiduciary duties and other violations of law. Concerned shareholders are advised to contact the firm now.
Strategy, together with its subsidiaries, provides enterprise analytics software and services and has, since 2020, increasingly focused on purchasing and holding bitcoin as its core business strategy. By October 2023, this bitcoin-centric approach became so central that the Company began referring to itself as a “Bitcoin Treasury Company,” using proceeds from equity and debt financings, as well as cash flows from operations, to accumulate bitcoin as its primary treasury reserve asset.
The investigation centers on allegations that certain directors and officers may have overstated the anticipated profitability of the Company’s bitcoin-focused investment strategy and treasury operations, while understating the risks associated with bitcoin’s volatility and the magnitude of potential losses following the adoption of ASU 2023-08 accounting standards.
On April 7, 2025, Strategy disclosed in an SEC filing that, following its adoption of ASU 2023-08, it 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.
Then, on May 1, 2025, Strategy issued a press release announcing its financial results for the first quarter of 2025. Therein, the Company confirmed that it had recorded an unrealized fair value loss on digital assets of approximately $5.9 billion during the quarter. On a subsequent earnings call to discuss these results, Company management explained that this loss stemmed from applying a fair value accounting methodology to Strategy’s bitcoin assets following bitcoin’s steep depreciation in value in the first quarter of 2025.
Long term shareholders of Strategy, Inc. stock may be able to pursue claims on behalf of the Company. An option may be a shareholder derivative action that seeks to recover damages on behalf of the Company and institute corporate governance reforms to prevent similar misconduct in the future.
Shamis & Gentile, P.A. stands out as an advocate for shareholders seeking corporate accountability and governance reforms. The firm is committed to pursuing derivative actions that benefit companies and their shareholders by recovering damages and implementing meaningful corporate governance improvements. Shamis & Gentile has recovered over $1 billion for consumers nationwide. Its extensive experience, expertise, and resources enable the firm to resolve disputes in a wide range of matters, including derivative actions, class actions and complex commercial litigation.
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