Michael Saylor has again hinted that Strategy would buy more Bitcoin, though the company formerly known as MicroStrategy and its top brass were hit with an investor lawsuit over its $5.9 billion first-quarter loss on its Bitcoin holdings.
Saylor posted a chart showing Strategyโs past Bitcoin (BTC) purchases to X on Sunday with the caption: โNothing Stops This Orange.โ
His past similar cryptic X posts have been the precursor to Strategy buying Bitcoin. The company has the largest Bitcoin holdings of all public companies at 592,100 BTC, worth around $59.7 billion, with Bitcoin trading just under $101,000.
Strategyโs top execs sued over $5.9 billion Bitcoin loss
Saylorโs post came after he, Strategy, and the companyโs top executives were sued by an investor on Thursday who claimed they breached their fiduciary duties before reporting a multibillion-dollar Bitcoin loss in its first quarter results.
The shareholder derivative complaint by Abhey Parmar, lodged in a Virginia federal court, alleged Saylor, Strategy CEO Phong Le, financial chief Andrew Kang and four board directors โmade materially false and misleading statementsโ about an accounting practice change.
The complaint said that in January, Strategy enacted a Financial Accounting Standards Board rule that came into effect a month earlier, allowing the corporate holders of crypto to use the estimated market value of their crypto in their balance sheets.
The suit alleged the accounting change caused Strategy to record a $5.9 billion unrealized loss on its Bitcoin for its Q1 results shared in early April, which caused the companyโs stock price to drop nearly 9%.
Shares in MicroStrategy Inc. (MSTR) are up nearly 28% this year, having clawed back from a low of just under $238 in early April. Source: Google Finance
In the lead up to the results, the complaint claimed Strategyโs executives โfailed to accurately disclose the full extentโ of the possible impact of the accounting change and that they didnโt disclose that โthe risks associated with Bitcoinโs volatility were greater than represented.โ
โThe Companyโs profitability when applying its bitcoin-driven investment strategy and treasury options were substantially less profitable than represented,โ the suit claimed.ย
Strategy execs allegedly make $31 million with โinflatedโ stock sales
The complaint also accused Strategyโs executives of โengaging in lucrative insider salesโ of the companyโs stock while it was โartificially inflatedโ before the impact of the accounting changes was made public.
The trades, Parmar claimed, saw the executives make off with nearly $31.5 million.
Related: Michael Saylorโs Strategy premium is not โunreasonableโ: Adam Backย
The complaint also accused the executives of abusing their control, gross mismanagement and wasting corporate assets.
Class action alleges Strategy misrepresented Bitcoin investment
Strategy was also hit with a proposed class-action lawsuit in mid-May, similarly over adopting the FASB crypto accounting rule that allegedly contributed to its Q1 losses.
That suit, filed by Anas Hamza, similarly alleged the company had โfailed to disclose the particular nature or scope of the expected impact while downplaying the attendant risksโ when it adopted the new way of accounting.
Strategy said in a regulatory filing in response to the proposed class action that it would โvigorously defend against these claims.โ
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