MicroStrategy Faces Class Action Probe While STRC Preferred Collapses to $75
MSTR•Rosen Law Firm launched a class action probe into MicroStrategy's Bitcoin treasury strategy, examining potential misleading statements on its aggressive Bitcoin accumulation model and funding structure. CryptoQuant urged Strategy to pause Bitcoin buys and rebuild its cash buffer as STRC preferred shares collapsed to a record low near $75.
1. Class Action Probe Initiated
Rosen Law Firm has opened an investigation into MicroStrategy and certain executives for potentially misleading statements regarding its Bitcoin treasury strategy and aggressive accumulation model. The probe covers common stock and preferred securities, including MSTR, STRC, STRF, STRK and STRD, inviting investors to join a potential class action.
2. Funding Model Under Scrutiny
CryptoQuant warned that Strategy should pause further Bitcoin purchases and rebuild its U.S. dollar cash buffer before resuming accumulation. The firm highlighted that the current cash reserve of roughly $1.4 billion may be insufficient to cover the annual $1.2 billion dividend obligations on STRC preferred shares if market conditions deteriorate.
3. Preferred Stock Stresses Capital Structure
STRC preferred stock plunged to a record low near $75, trading well below its $100 par value and reflecting heightened funding pressures. Dividend payments remain discretionary, and continued reliance on preferred share issuance raises questions about the sustainability of Strategy’s financing model amid Bitcoin price volatility.
