Скачать или смотреть Investor Class Action Filed Against MicroStrategy, Inc. (MSTR) for Securities Fraud Violations

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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.