Saylor Hints at More Bitcoin Buys Amid Lawsuits

Saylor Hints at More Bitcoin Buys Amid Lawsuits

Michael Saylor, despite facing investor lawsuits against MicroStrategy (now called Strategy) over significant Bitcoin losses, recently hinted at further Bitcoin acquisitions. This follows a $5.9 billion first-quarter loss on the company's Bitcoin holdings.

Saylor posted a chart on X (formerly Twitter) showcasing Strategy's historical Bitcoin (BTC) purchases, accompanied by the caption: “Nothing Stops This Orange.” This cryptic post, mirroring previous announcements, is widely interpreted as a precursor to another Bitcoin purchase by Strategy, which currently holds 592,100 BTC, valued at approximately $59.7 billion (with BTC trading near $101,000).

Strategy Executives Sued Over Bitcoin Losses

This announcement comes on the heels of a lawsuit filed against Saylor, Strategy CEO Phong Le, CFO Andrew Kang, and four board directors. The lawsuit, filed by investor Abhey Parmar in a Virginia federal court, alleges breach of fiduciary duty due to the reporting of the multibillion-dollar loss. The complaint centers on a change in accounting practices (adopting a Financial Accounting Standards Board rule) which resulted in the reporting of the significant unrealized loss and a subsequent nearly 9% drop in the company's stock price.

The suit claims Strategy’s executives failed to fully disclose the potential impact of the accounting change and downplayed the risks associated with Bitcoin’s volatility. It also alleges that the company’s profitability, when considering its Bitcoin-driven investment strategy, was less than represented.

Allegations of Insider Trading

Further allegations include the executives engaging in “lucrative insider sales” of company stock before the accounting changes were public, netting them approximately $31.5 million. The lawsuit accuses the executives of abusing their control, gross mismanagement, and wasting corporate assets.

Second Class-Action Lawsuit

This isn't the first lawsuit Strategy is facing. In May, a proposed class-action lawsuit was filed, similarly focusing on the adoption of the new FASB crypto accounting rule and the alleged lack of transparency regarding the potential impact and associated risks. Strategy has stated that it will vigorously defend against these claims.

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