Pomerantz Law Firm Files Class Action Against MicroStrategy and Executives Following Major Losses
On July 12, 2025, the Pomerantz Law Firm made headlines by announcing the initiation of a class action lawsuit against MicroStrategy Incorporated, often referred to simply as "Strategy," along with several of its key executives. This lawsuit is significant for investors impacted by the company’s actions and its approach to cryptocurrency, particularly Bitcoin, which has defined its business model in recent years.
The class action, registered in the United States District Court for the Eastern District of Virginia under the docket number 25-cv-00861, represents individuals and entities who purchased or otherwise acquired MicroStrategy's securities during the specified Class Period from April 30, 2024, to April 4, 2025. The lawsuit seeks to recover damages purportedly caused by the defendants' alleged violations of federal securities laws, specifically pursuing remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
Investors have been given a deadline of July 15, 2025, to seek lead plaintiff status in this class action, which potentially opens the door for many to seek redress.
MicroStrategy, a leading company in enterprise analytics software, has increasingly pivoted towards a business strategy focused largely on Bitcoin, positioning itself as a “Bitcoin Treasury Company.” This shift became evident in October 2023 when the company started to emphasize its accumulation of Bitcoin as a major component of its financial strategy. MicroStrategy’s decision to invest and hold powerful positions in Bitcoin has been touted by its executives as a ground-breaking strategy intended to generate substantial shareholder value. New performance indicators titled "BTC Yield," "BTC Gain," and "BTC $ Gain" were introduced to illustrate the company's commitment to its Bitcoin-centric approach.
However, during the Class Period, defendants are alleged to have made misleading statements regarding the overall health of the company's investment strategy. Rather than revealing the true risks associated with Bitcoin’s notorious volatility and its potential impact on asset valuation, they provided overly optimistic assessments about the company’s treasury operations. The lawsuit claims these actions misled investors and created an inflated perception of profitability and risk management practices within the firm.
A pivotal moment occurred on April 7, 2025, when MicroStrategy formally reported an unrealized loss of approximately $5.91 billion on its digital assets as a result of newly adopted accounting practices under the Financial Accounting Standards Board (FASB) Accounting Standards Update No. 2023-08. This update altered how public companies report cryptocurrency assets, requiring them to use fair valuation methods on their balance sheets. As a consequence of the losses recognized, the company experienced an 8.67% decline in its stock price, reflecting market reaction to the unexpected financial setbacks.
By May 1, 2025, this grim financial health was further confirmed, as additional statements reinforced the notion that the valuation of its Bitcoin assets had significantly depreciated. Management acknowledged that these results stemmed from following the fair value accounting model adopted post-updating accounting standards, which led to discovering losses greatly exceeding prior expectations.
Pomerantz LLP stands as a pioneering firm in corporate class litigation, reporting extensive experience in navigating complex securities issues since its inception headed by Abraham L. Pomerantz, often dubbed as the dean of class action law. The firm’s relentless campaign for justice focuses on ensuring that victims of securities fraud and corporate malfeasance can reclaim their rights. In light of the recent legal actions, individuals affected by MicroStrategy's financial directions may now have an avenue to seek justice and recovery in the evolving landscape of cryptocurrency investments. For additional details regarding this class action, individuals are encouraged to visit Pomerantz's official site or contact their office for assistance.
This situation continues to unfold, and as the case progresses, the implications for MicroStrategy and its investors could be significant. With cryptocurrency more prominent than ever in global finance, the outcome of this lawsuit may also set a precedent for how companies manage and report their digital asset holdings in the future.
The class action, registered in the United States District Court for the Eastern District of Virginia under the docket number 25-cv-00861, represents individuals and entities who purchased or otherwise acquired MicroStrategy's securities during the specified Class Period from April 30, 2024, to April 4, 2025. The lawsuit seeks to recover damages purportedly caused by the defendants' alleged violations of federal securities laws, specifically pursuing remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934.
Investors have been given a deadline of July 15, 2025, to seek lead plaintiff status in this class action, which potentially opens the door for many to seek redress.
MicroStrategy, a leading company in enterprise analytics software, has increasingly pivoted towards a business strategy focused largely on Bitcoin, positioning itself as a “Bitcoin Treasury Company.” This shift became evident in October 2023 when the company started to emphasize its accumulation of Bitcoin as a major component of its financial strategy. MicroStrategy’s decision to invest and hold powerful positions in Bitcoin has been touted by its executives as a ground-breaking strategy intended to generate substantial shareholder value. New performance indicators titled "BTC Yield," "BTC Gain," and "BTC $ Gain" were introduced to illustrate the company's commitment to its Bitcoin-centric approach.
However, during the Class Period, defendants are alleged to have made misleading statements regarding the overall health of the company's investment strategy. Rather than revealing the true risks associated with Bitcoin’s notorious volatility and its potential impact on asset valuation, they provided overly optimistic assessments about the company’s treasury operations. The lawsuit claims these actions misled investors and created an inflated perception of profitability and risk management practices within the firm.
A pivotal moment occurred on April 7, 2025, when MicroStrategy formally reported an unrealized loss of approximately $5.91 billion on its digital assets as a result of newly adopted accounting practices under the Financial Accounting Standards Board (FASB) Accounting Standards Update No. 2023-08. This update altered how public companies report cryptocurrency assets, requiring them to use fair valuation methods on their balance sheets. As a consequence of the losses recognized, the company experienced an 8.67% decline in its stock price, reflecting market reaction to the unexpected financial setbacks.
By May 1, 2025, this grim financial health was further confirmed, as additional statements reinforced the notion that the valuation of its Bitcoin assets had significantly depreciated. Management acknowledged that these results stemmed from following the fair value accounting model adopted post-updating accounting standards, which led to discovering losses greatly exceeding prior expectations.
Pomerantz LLP stands as a pioneering firm in corporate class litigation, reporting extensive experience in navigating complex securities issues since its inception headed by Abraham L. Pomerantz, often dubbed as the dean of class action law. The firm’s relentless campaign for justice focuses on ensuring that victims of securities fraud and corporate malfeasance can reclaim their rights. In light of the recent legal actions, individuals affected by MicroStrategy's financial directions may now have an avenue to seek justice and recovery in the evolving landscape of cryptocurrency investments. For additional details regarding this class action, individuals are encouraged to visit Pomerantz's official site or contact their office for assistance.
This situation continues to unfold, and as the case progresses, the implications for MicroStrategy and its investors could be significant. With cryptocurrency more prominent than ever in global finance, the outcome of this lawsuit may also set a precedent for how companies manage and report their digital asset holdings in the future.
Topics Financial Services & Investing）
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