, citing $5.9B in unrealized Bitcoin losses and alleged investor misinformation.){kind=link}
Pomerantz LLP, a prominent New York-based law firm, has launched a class action lawsuit targeting Michael Saylor-led Strategy, formerly known as MicroStrategy.
The legal complaint alleges that the company and certain top executives violated federal securities laws by issuing false or misleading statements.
The statements cut across concerning the profitability and financial stability of its high-profile Bitcoin investment strategy.
The lawsuit was officially filed in the U.S. District Court for the Eastern District of Virginia and is focused on claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as well as SEC Rule 10b-5.
The class period covers investors who purchased or acquired Strategy securities between April 30, 2024, and April 4, 2025.
Investors Encouraged to Join Lawsuit by July 15
According to Pomerantz LLP, investors who suffered financial losses during the defined class period are eligible to join the class action suit and must file for lead plaintiff status by July 15, 2025.
The firm is encouraging affected investors to contact them for more information, offering both phone and email support.
The complaint is listed under case number 25-cv-00861 and seeks damages related to the company’s alleged failure to properly disclose critical financial risks.
The law firm has made the complaint accessible through its website and urges interested investors to provide contact details and shareholding information when inquiring.
Also Read: Saudi Central Bank Moves Towards Bitcoin, Taps MicroStrategy With 25,656 Share Acquisition
Key Focus: $5.9 Billion in Unrealized Losses on Bitcoin Holdings
Central to the lawsuit is Strategy’s reported $5.9 billion in unrealized losses on its Bitcoin holdings in Q1 2025.
Largely this was due to its adoption of ASU 2023-08, an updated accounting standard that mandates real-time valuation of digital assets.
The disclosure reportedly triggered an 8% drop in the company’s stock price, raising concerns among investors and regulators about the transparency and accuracy of Strategy’s financial reporting.
Pomerantz LLP contends that the company failed to sufficiently inform shareholders of the potential volatility and risks associated with this new accounting method and its implications for reported earnings.
Strategy’s Long-Term Bitcoin Strategy and Market Reaction
Since 2020, Strategy has aggressively accumulated Bitcoin as a central component of its corporate treasury strategy, making it the largest public holder of Bitcoin globally, with a staggering 597,325 BTC under management.
The bold move has paid off in market value, with the company’s stock (MSTR) climbing over 3,328% in the past five years, according to Yahoo Finance.
Strategy’s success has influenced other companies, such as Metaplanet, to adopt similar crypto-centric approaches.
Despite this growth, recent financial losses and heightened regulatory scrutiny have cast a shadow over the sustainability and transparency of this strategy.
Market Remains Volatile Amid Lawsuit and Investor Sentiment
Despite the lawsuit and recent financial setbacks, Strategy’s stock demonstrated resilience, closing last Wednesday with a 7.76% gain at $402.28.
Analysts are closely watching how this legal challenge will affect shareholder confidence, regulatory relationships, and the broader trend of corporate crypto adoption.
However, the class action introduces a new layer of uncertainty for both the company and its investors.
As more investors consider joining the lawsuit, the outcome could set a precedent for how publicly traded firms report and manage large-scale digital asset investments moving forward.
Also Read: MicroStrategy Buys 1,895 More BTC for $180.3M, Pushing Total Holdings to 555,450 Bitcoin