MicroStrategy Faces Class-Action Probe as Preferred Shares Plunge 25%
MSTR•Rosen Law Firm launched a class-action probe into MicroStrategy’s disclosures on its Bitcoin accumulation model, covering common shares and multiple preferred and convertible securities. MicroStrategy’s STRC preferred stock plunged 25% to $75, spurring calls to pause Bitcoin purchases and rebuild its $1.4 billion cash reserve.
1. Class-Action Probe Initiated
Rosen Law Firm launched an investigation into MicroStrategy and select executives for alleged misleading statements on its business operations, Bitcoin treasury strategy and profitability. The probe spans common stock and multiple preferred and convertible securities including STRC, STRF, STRK and STRD, inviting investor participation in a potential class action.
2. Preferred Shares Crash 25%
MicroStrategy’s perpetual preferred stock STRC plunged 25% to an all-time low of $75 as Bitcoin prices dipped toward $58,115. The collapse intensifies concerns over the sustainability of its 11.5% annual dividend, which would require roughly $1.2 billion in cash annually against a $1.4 billion reserve.
3. CryptoQuant Urges Pause on Bitcoin Buys
CryptoQuant analysts recommend halting further Bitcoin acquisitions and rebuilding the U.S. dollar cash buffer after STRC traded below its $100 par value. With MicroStrategy holding over 847,000 BTC, weakened liquidity coverage raises risks to its aggressive Bitcoin accumulation model.
4. Bubble Concerns in Bitcoin Treasury Sector
MicroStrategy common shares have broken the $100 support level and trade at an mNAV of 0.70, reflecting a discount to its Bitcoin holdings. Observers warn the downturn mirrors a textbook bubble chart, suggesting sector-wide contagion for smaller treasury-focused firms.
