MicroStrategy, now operating under its new name “Strategy,” continues to push the boundaries of corporate cryptocurrency investment. While other companies tread carefully around Bitcoin’s volatility, Strategy is doubling down—even in the face of a serious legal challenge. The company, led by outspoken Bitcoin advocate Michael Saylor, is now the subject of a class action lawsuit after allegedly downplaying the financial risks of its Bitcoin-heavy strategy. Despite this, it has just purchased another 7,390 BTC, worth nearly $765 million.

This bold move has raised questions across financial and crypto communities alike: is this unwavering commitment to Bitcoin strategic genius, or is it setting the company up for future trouble?

Lawsuit Alleges Misleading Bitcoin Disclosures

Strategy is being targeted in a class action lawsuit filed in the U.S. District Court for the Eastern District of Virginia. The case is spearheaded by the law firm Pomerantz LLP and names both the company and senior executives as defendants. At the center of the legal action is the company’s alleged failure to disclose the full implications of a newly implemented accounting standard, ASU 2023-08, which requires firms to report the fair market value of digital assets such as Bitcoin on their balance sheets.

According to the lawsuit, Strategy did not adequately inform investors about a potential $5.91 billion impairment loss related to Bitcoin’s price fluctuations. Furthermore, the complaint accuses the company of inflating perceptions of profitability by using unconventional and unaudited performance metrics like “BTC Yield” and “BTC $ Gain”—figures that do not align with generally accepted accounting principles (GAAP).

The situation worsened when investors learned the scale of the unrealized losses. On April 7, after initial reports of the financial shortfall became public, shares of MicroStrategy (MSTR) dropped by 8.67%. By May 1, when earnings confirmed the multi-billion-dollar hit, investor confidence was visibly shaken.

Another Massive Bitcoin Purchase Amid Legal Turmoil

Despite the lawsuit and growing investor unease, Strategy has not changed course. In fact, it has once again expanded its already massive Bitcoin position. As revealed in a regulatory filing on May 19, the company purchased an additional 7,390 BTC for approximately $764.9 million, at an average price of $103,498 per coin.

The purchase was financed through an at-the-market (ATM) equity offering, along with the issuance of a new Series A preferred stock under the ticker STRK. This move increases Strategy’s total Bitcoin holdings to 576,230 BTC—valued at around $59 billion based on current market prices. The company’s new average cost per coin now stands at approximately $69,726.

No Signs of a Shift in Strategy

Despite mounting pressure, there is no indication that the company plans to ease up on its aggressive Bitcoin accumulation strategy. Michael Saylor, who serves as Strategy’s Executive Chairman, has long maintained a firm belief that Bitcoin is the ultimate store of value—often referring to it as “digital gold.” His philosophy appears unchanged, even amid legal risks and market volatility.

“My formula for success is rise early, work late, and buy Bitcoin,” Saylor famously stated—an approach the company continues to follow, regardless of headlines or investor reactions.

This latest purchase, made under legal and financial scrutiny, underscores just how deeply embedded Bitcoin has become in Strategy’s identity. It’s a business model built around a single asset class, and while that has won praise in some corners of the crypto world, it’s also led to rising concerns among regulators and shareholders.

High Stakes, High Conviction

Strategy’s actions have drawn both admiration and skepticism. To its supporters, the company’s resilience in the face of market downturns is commendable. To critics, it’s an alarming gamble that could backfire if Bitcoin’s value experiences another sharp decline.

In a market known for its volatility, the firm’s future remains tied almost entirely to Bitcoin’s performance. Whether this high-conviction play results in long-term dominance or financial disaster remains to be seen. What is clear, however, is that Strategy is showing no signs of retreat.

The lawsuit might play out in court, but in the markets, Strategy has already made its next move.