Strategy Ramps Up 7,390 BTC , Faces MSTR Lawsuit

Strategy, formerly known as MicroStrategy, significantly expanded its Bitcoin holdings last week, purchasing 7,390 BTC at an average price of $103,498 per coin, totaling approximately $765 million. This acquisition brings Strategy’s total Bitcoin holdings to 576,230 BTC, valued at around $60.64 billion as of the press time with an average purchase price of $69,726 per coin, reflecting a year-to-date yield of 16.3%.

However, alongside this aggressive accumulation, Strategy disclosed on May 16, 2025, that it is facing a class-action lawsuit filed in the U.S. District Court for the Eastern District of Virginia. The lawsuit, initiated by plaintiff Anas Hamza, alleges that Strategy and its executives, including co-founder Michael Saylor, made false or misleading statements regarding the expected profitability and risks of its Bitcoin investment strategy, potentially violating federal securities laws.

Strategy’s Bitcoin Accumulation Strategy

Strategy has been a leader in corporate Bitcoin adoption since 2020, consistently acquiring the cryptocurrency as a treasury reserve asset. Alongside this approach, its stock price (MSTR) has experienced significant volatility, rising from around $12 in 2020 to a historic peak of $421.88 in November 2024. It later pulled back and stabilized in the lower $300 range. In April 2025, as Bitcoin’s price surged again, MSTR’s stock price climbed once more, reaching $413.42 on May 19.

To finance its Bitcoin purchases, Strategy initially tapped into its treasury cash reserves, as noted in historical reports. Over time, the company adopted more sophisticated financing methods to sustain its aggressive acquisition strategy. Since early November 2024, Strategy has been purchasing Bitcoin almost weekly, typically funding these acquisitions through debt and equity offerings.

Crypto researcher @0xjaypeg, as reported by TechFlow, analyzed Strategy’s approach, highlighting its core strength in flexible financing methods.

• When implied volatility is high, Strategy sells call or convertible options on MSTR stock, setting strike prices between 30% and 300% of the current stock price, and collects full proceeds upfront through structured transactions.

• When MSTR’s net asset value (NAV) premium is high, Strategy issues additional shares via an at-the-market (ATM) mechanism to raise funds.

• If neither condition is met, the company issues more preferred shares, such as STRK or STRF.

Strategy’s core strategy revolves around raising funds to buy more Bitcoin, paying investors MSTR stock profits, and distributing regular interest or dividends. Its profitability hinges entirely on Bitcoin’s capital appreciation, allowing investors to benefit from Bitcoin’s price volatility.

Notably, Saylor has not outlined a clear plan to repay the principal on these options or bonds, focusing instead on maintaining the financing plan’s long-term sustainability by covering interest payments until MSTR’s stock price reaches the relevant strike prices.

@0xjaypeg pointed out that, based on Strategy’s key financial data, the company’s leverage is actually quite limited, with extremely low debt costs, suggesting there’s little concern over high leverage risks in this strategy.

This complex financing approach has provided substantial capital for Bitcoin acquisitions but has also drawn scrutiny. Investors have questioned whether Strategy downplayed the risks of Bitcoin price volatility in its financing efforts while overstating the profitability of its investments, leading to a class-action lawsuit.

Details of the Class-Action Lawsuit

In its latest SEC filing, Strategy disclosed that a purported class-action lawsuit was filed in the U.S. District Court for the Eastern District of Virginia. The lawsuit, filed on May 16, 2025, claims that between April 30, 2024, and April 4, 2025, Strategy misled investors by downplaying the risks associated with Bitcoin’s price volatility and overstating the profitability of its investment approach. According to the complaint, this led to a reported $5.9 billion unrealized loss in the first quarter of 2025, a point of contention for investors. The legal action names Strategy’s CEO Michael Saylor, CFO Phong Le, and executive Andrew Kang as defendants, accusing them of failing to adequately disclose the financial risks tied to the company’s Bitcoin-centric strategy.

The lawsuit has sparked debate within the crypto industry. DeFiLlama developer @0xngmi voiced support for Strategy on X, arguing that the lawsuit stems from investors “complaining that MicroStrategy understated how much money it could lose if BTC went down.” He added, “But if you’re buying a company that is self-labeled as ‘leverage on Bitcoin,’ what do you expect? It’s pretty clear what will happen if BTC goes down.”

From a price performance perspective, Strategy’s stock has not been significantly impacted by the class-action lawsuit. On May 19, MSTR closed at $413.42, up 3.41% for the day, with a slight decline of 0.08% after hours.