Strategy, formerly MicroStrategy, the top corporate Bitcoin holder, acquired nearly $765 million of Bitcoin last week. The purchase came as the company faced a class-action lawsuit.
According to a May 19 announcement, Strategy acquired 7,390 BTC for about $764.9 million at an average price just under $103,500. Strategy reported a Bitcoin yield of 16.3% year-to-date. Strategy executive chairman Michael Saylor made his usual hint at the purchase in a May 18 X post.
Source: Michael Saylor
According to a May 19 filing with the US Securities and Exchange Commission (SEC), the firm was also the recipient of a class-action lawsuit. The suit accuses Strategy officials of having failed to represent the nature of Bitcoin investments accurately.
As of May 18, Strategy holds 576,230 BTC acquired for around $40.2 billion at an average price of $69,726 per coin. At current prices, the company’s total holdings are valued at more than $59.2 billion, representing an unrealized gain of $19.2 billion, or 47%.
According to CoinMarketCap data, Bitcoin traded at around $102,615 at the time of writing, up 20.3% over the last month.
Bitcoin’s price chart. Source: CoinMarketCap
Related: Jim Chanos takes opposing bets on Bitcoin and Strategy
Strategy hit with a lawsuit
In a recent SEC filing, the firm wrote that “a purported class-action lawsuit was filed in the US District Court for the Eastern District of Virginia” against the company’s executives. Strategy chairman Michael Saylor, president and CEO Phong Le and executive vice president and chief financial officer Andrew Kang are all defendants in the suit.
Strategy officials are accused of “violations of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 thereunder, and Section 20(a) of the Exchange Act.” The filing states:
“The [suit claims] that the named defendants made false and/or misleading statements with respect to and/or failed to disclose information with respect to the anticipated profitability of our Bitcoin-focused investment strategy and treasury operations, and the various risks associated with bitcoin’s volatility.“
0xngmi, a pseudonymous developer at decentralized finance data platform DefiLlama, wrote in a May 19 X post that he believes the lawsuit has no basis. He explained that the suit “seems to be people complaining that [Strategy] understated how much money it could lose if BTC went down.” Still, he argued that the risks were not understated:
“You’re buying a company that is self-labelled as “leverage on Bitcoin,” what do you expect?”Source: 0xngmi
Related: Strategy will beat all public equities with Bitcoin, analyst says
Corporate Bitcoin treasury trend grows
Strategy’s Bitcoin treasury strategy has inspired multiple other companies to follow in its footsteps. Last week, shares of luxury watchmaker Top Win surged more than 60% in premarket trading after the company said it would adopt a Bitcoin accumulation strategy and had changed its name to AsiaStrategy.
AsiaStrategy said it is partnering with Sora Ventures to implement its plan, which previously partnered with Metaplanet in 2024 to create Japan’s first corporate Bitcoin treasury. Metaplanet now holds more Bitcoin than El Salvador. Also last week, a Bahrain-based listed catering company with a $24.2 million market cap adopted a Bitcoin treasury strategy in partnership with investment firm 10X Capital.
Magazine: Rise of MicroStrategy clones, Asia dominates crypto adoption: Asia Express 2024 review
