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 Strategys past Bitcoin (BTC) purchases to X on Sunday with the caption: Nothing Stops This Orange.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.Source: Michael SaylorStrategys top execs sued over $5.9 billion Bitcoin lossSaylors post came after he, Strategy, and the companys 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 made materially false and misleading statements 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 companys stock price to drop nearly 9%.Edit the caption here or remove the textShares 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 FinanceIn the lead up to the results, the complaint claimed Strategys executives failed to accurately disclose the full extent of the possible impact of the accounting change and that they didnt disclose that the risks associated with Bitcoins volatility were greater than represented.The Companys profitability when applying its bitcoin-driven investment strategy and treasury options were substantially less profitable than represented, the suit claimed.Strategy execs allegedly make $31 million with inflated stock salesThe complaint also accused Strategys executives of engaging in lucrative insider sales of the companys stock while it was artificially inflated 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 Saylors Strategy premium is not unreasonable: Adam BackThe complaint also accused the executives of abusing their control, gross mismanagement and wasting corporate assets.Class action alleges Strategy misrepresented Bitcoin investmentStrategy 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 failed to disclose the particular nature or scope of the expected impact while downplaying the attendant risks when it adopted the new way of accounting.Strategy said in a regulatory filing in response to the proposed class action that it would vigorously defend against these claims.Magazine: Baby boomers worth $79T are finally getting on board with Bitcoin