MicroStrategy, Inc. Securities Lawsuit Investigation

Shamis & Gentile P.A., a law firm that advocates for investors who are victims of securities fraud, is investigating potential claims against MicroStrategy, Inc. (MSTR).

If you purchased or held MicroStrategy, Inc. securities and suffered losses, you may be eligible to join this securities investigation and seek compensation.

The matters described are not findings of fact. No court has determined liability.

About MicroStrategy, Inc.

MicroStrategy develops and sells enterprise analytics software and services, including offerings powered by artificial intelligence.

Since 2020, MicroStrategy has increasingly focused on acquiring and holding bitcoin as a core part of its corporate strategy. The company uses proceeds from equity and debt financings, along with operational cash flows, to accumulate bitcoin, which it reports as its primary treasury reserve asset.

In October 2024, MicroStrategy publicly described itself as the “world’s first Bitcoin Treasury Company” and announced a significant capital plan to further expand its bitcoin holdings.

What's being investigated

The investigation centers on whether certain officers and directors of MicroStrategy may have breached their fiduciary duties to the company and its shareholders. According to a recently filed securities fraud class action complaint, it is alleged that MicroStrategy and specific officers made materially false and misleading statements regarding the company’s business, operations, and prospects.

The complaint contends that:

• The anticipated profitability of MicroStrategy’s bitcoin-focused investment strategy and treasury operations was overstated.
• The risks associated with bitcoin’s volatility and the magnitude of potential losses following the adoption of new accounting rules (ASU 2023-08) were understated.
• As a result, public statements made by the company and its officers may have been materially misleading.

Shareholders are also examining whether board-level oversight of these risks was adequate, and whether related-party indemnity arrangements and governance structures created conflicts of interest.

Key timeline

• 2020 — MicroStrategy board adopts bitcoin as the primary treasury reserve asset, initiating a series of capital raises to fund bitcoin purchases.

_Investors allege this marked a fundamental shift in risk profile and disclosure requirements._

• October 30, 2024 — Company brands itself as the “world’s first Bitcoin Treasury Company” and announces the “21/21 Plan” to raise $42 billion for additional bitcoin acquisitions. _This public repositioning is cited as evidence of the centrality of bitcoin risk to the company’s operations._
• Q3 2024 — MicroStrategy’s 10-Q warns that adoption of ASU 2023-08 (effective January 1, 2025) will materially increase financial statement volatility and may have adverse tax consequences. _Investors argue these disclosures may not have fully captured the magnitude of potential losses._
• April 7, 2025 — Company discloses a $5.91 billion unrealized loss from digital assets in Q1 2025; a $14.05 billion unrealized gain is reported for Q2 2025, highlighting extreme volatility. _Shareholders allege these swings were not adequately forewarned._
• April 30, 2024–April 4, 2025 — Class action period in which plaintiffs allege the profitability of the bitcoin strategy was overstated and loss risks understated.

Why investors may be concerned

Investors allege that MicroStrategy’s officers and directors may have:

• Made misleading statements or omissions regarding the risks and profitability of the company’s bitcoin-centric strategy.
• Failed to implement or maintain adequate board-level oversight systems to monitor mission-critical risks, such as bitcoin price volatility, fair-value accounting impacts, and tax exposure.
• Approved or maintained related-party indemnity arrangements that could have created conflicts of interest, particularly with respect to D&O insurance provided by the executive chairman.
• Overstated the anticipated benefits of the bitcoin strategy while understating the potential for large unrealized losses following the adoption of new accounting standards.

Stockholders argue these issues may implicate duties of loyalty and oversight under Delaware law, and raise questions about the adequacy of risk disclosures and governance controls.

What investors can watch next

At this time, no specific upcoming court dates or regulatory milestones have been disclosed in the public record. Investors may wish to monitor:

• Future SEC filings and earnings releases for additional disclosures or risk factor updates.
• Announcements regarding board or governance changes.
• Any court filings or updates in the ongoing class action or potential derivative proceedings.

FAQs

What is a derivative lawsuit?

A derivative lawsuit is a legal action brought by shareholders on behalf of the company against officers or directors for alleged breaches of fiduciary duty.

Does this article mean the company broke the law?

No. These are allegations only; no court has found MicroStrategy or its officers/directors liable.

What types of governance reforms can result?

Possible reforms may include enhanced risk oversight, changes to board or committee structures, improved disclosure controls, or modifications to indemnity arrangements.

What is the significance of ASU 2023-08?

ASU 2023-08 is an accounting rule change that requires companies to report digital asset holdings at fair value, increasing financial statement volatility.

Can officers be held liable even if directors are not?

Yes. Under Delaware law, officers may face liability for oversight failures or misstatements even where director claims are limited.

Your Rights and Next Steps

This is an active investigation into potential breaches of fiduciary duty and related allegations at MicroStrategy, Inc. If you purchased MicroStrategy shares prior to April 30, 2024 and still hold shares, you may have standing to pursue a derivative action on behalf of the company.

Shareholders in derivative actions can seek:

• Corporate governance reforms to improve oversight and risk management.
• The return of funds to the company if improper payments or conflicts are proven.
• Court-approved incentive awards for serving as a lead plaintiff, if the action is successful.

You May Be Entitled to Compensation

Securities investigations are time-sensitive. If you purchased or held MicroStrategy shares before April 30, 2024 and continue to hold them, you may be eligible to participate in this investigation and seek remedies on behalf of the company.

Please complete the form below to join the investigation.