MicroStrategy Faces Class Action Lawsuit Over Alleged Bitcoin Investment Misrepresentations

MicroStrategy, the leading corporate Bitcoin holder headed by Michael Saylor, is confronting a class action lawsuit filed by prominent New York law firm Pomerantz LLP. The legal action, submitted to the Eastern District Court of Virginia, alleges the company concealed critical information while misleading investors about profitability and risks associated with its Bitcoin investment strategy between April 30, 2024, and April 4, 2025.

The complaint asserts that MicroStrategy and CEO Michael Saylor emphasized positive metrics like Bitcoin Yield and Bitcoin Gain while allegedly downplaying substantial risks, including cryptocurrency price volatility and impending accounting regulation changes. According to plaintiffs, this selective disclosure prevented investors from making fully informed decisions.

A pivotal element of the case involves MicroStrategy's adoption of new cryptocurrency accounting standards (ASU 2023-08), which require real-time valuation of Bitcoin holdings rather than historical cost accounting. This change revealed $5.9 billion in unrealized losses in early 2025, triggering an 8% stock price decline when disclosed.

Despite recently reporting a 7.7% share price increase to $402.28, MicroStrategy now faces significant legal scrutiny. The company maintains its industry-leading position with 597,000 Bitcoin (valued at approximately $65.85 billion) and has inspired corporate imitators like Japan's Metaplanet. With a July 15 deadline for investor participation, this lawsuit raises fundamental questions about corporate cryptocurrency investment disclosures.

As the dominant public company Bitcoin holder since 2020, MicroStrategy's 204% stock growth over the past year now confronts serious legal challenges that may impact broader institutional cryptocurrency adoption.