Robbins LLP is Investigating Allegations that MicroStrategy Incorporated (MSTR) Misled Investors Regarding the Profitability of its Bitcoin-Focused Investment Strategy

Robbins LLP informs stockholders that a class action was filed on behalf of investors who purchased or otherwise acquired MicroStrategy Incorporated d/b/a Strategy (NASDAQ: MSTR) securities between April 30, 2024 and April 4, 2025. Strategy, together with its subsidiaries, provides enterprise analytics software and services purportedly powered by artificial intelligence (“AI”).

The Allegations:

According to the complaint, during the class period, defendants failed to disclose that: (i) the anticipated profitability of the Company’s bitcoin-focused investment strategy and treasury operations was overstated; (ii) the various risks associated with bitcoin’s volatility and the magnitude of losses Strategy could recognize on the value of its digital assets following its adoption of ASU 2023-08 were understated; and (iii) as a result, Defendants’ public statements were materially false and misleading at all relevant times.

The complaint alleges that on April 7, 2025, Strategy disclosed in an SEC filing that, following its adoption of ASU 2023-08, it recognized a $5.91 billion unrealized loss on its digital assets for the first quarter of 2025, which was expected to result in a net loss for the quarter.  As a result, Strategy warned investors that “[w]e may not be able to regain profitability in future periods, particularly if we incur significant unrealized losses related to our digital assets.”  On this news, Strategy’s Class A common stock price fell $25.47 per share, or 8.67%, to close at $268.14 per share on April 7, 2025.

Then, on May 1, 2025, Strategy issued a press release announcing its financial results for the first quarter of 2025.  Therein, the Company confirmed that it had recorded an unrealized fair value loss on digital assets of approximately $5.9 billion during the quarter.  On a subsequent earnings call to discuss these results, Company management explained that this loss stemmed from applying a fair value accounting methodology to Strategy’s bitcoin assets following bitcoin’s steep depreciation in value in the first quarter of 2025.

What Now: You may be eligible to participate in the class action against MicroStrategy Incorporated. Shareholders who want to serve as lead plaintiff for the class are required to file their papers with the court by July 15, 2025. The lead plaintiff is a representative party who acts on behalf of other class members in directing the litigation.  You do not have to participate in the case to be eligible for a recovery. If you choose to take no action, you can remain an absent class member. For more information, click here.