A securities class action has been filed against MicroStrategy Incorporated (MSTR) on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired Strategy securities between April 30, 2024 through April 4, 2025. This case has been filed in the USDC – EDVA.
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: (i) the anticipated profitability of the Company’s bitcoin-focused investment strategy and treasury operations was overstated; (ii) 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 (iii) as a result, Defendants’ public statements were materially false and misleading at all relevant times.
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.