MicroStrategy Investigated Over Bitcoin Funding as STRC Plunges 25%
MSTR•Rosen Law Firm launched an investigation into MicroStrategy’s Bitcoin strategy, probing whether disclosures on operations, profitability and funding were materially misleading. CryptoQuant recommended pausing new Bitcoin purchases after preferred stock STRC plunged 25% below par, while annual dividend obligations of $1.2 billion strain its US dollar cash buffer.
1. Rosen Law Firm Investigation
Rosen Law Firm has initiated a probe into whether MicroStrategy and its executives made materially misleading statements regarding their business operations, profitability and Bitcoin treasury funding model. The investigation covers common stock MSTR and preferred share classes STRC, STRF, STRK and STRD, inviting investors to join a potential class action.
2. STRC Preferred Stock Plunge
MicroStrategy’s perpetual preferred stock STRC plunged roughly 25% below its $100 par value to a record low near $75, driven by concerns over discretionary dividends and reliance on share issuance for Bitcoin purchases. Annual dividend obligations of about $1.2 billion now strain a $1.4 billion cash reserve, highlighting funding risks.
3. CryptoQuant Funding Warning
CryptoQuant analysts recommended that MicroStrategy pause new Bitcoin acquisitions and rebuild its US dollar cash buffer to shore up its liquidity. The advisory underscores increasing pressure on the firm’s aggressive Bitcoin accumulation strategy as preferred shares trade at steep discounts and overall market volatility rises.
