Source: Cointelegraph
Original: “Strategy Company Invests $765 Million to Acquire 7,390 Bitcoins, Immediately Faces Class Action Lawsuit”
Strategy (formerly MicroStrategy), as a top corporate Bitcoin (BTC) holder, acquired nearly $765 million worth of Bitcoin last week. This purchase comes at a time when the company is facing a class action lawsuit.
According to an announcement on May 19, Strategy purchased 7,390 Bitcoins at an average price slightly below $103,500, totaling approximately $764.9 million. Strategy reported a year-to-date return of 16.3% on its Bitcoin investments.
Documents submitted to the U.S. Securities and Exchange Commission (SEC) on May 19 indicate that the company has recently faced a class action lawsuit. The lawsuit alleges that Strategy's executives failed to accurately represent the essential characteristics of Bitcoin investments.
As of May 18, Strategy held 576,230 Bitcoins, with a total investment of approximately $40.18 billion, at an average cost of $69,726 per Bitcoin. Based on the latest market prices, the total value of the company's Bitcoin holdings exceeds $59.2 billion, with unrealized gains of $19.2 billion, resulting in a return of 47%.
According to CoinMarketCap data, at the time of writing, the trading price of Bitcoin is approximately $102,615, with a 20.3% increase over the past month.
In a recent announcement, "a class action lawsuit was filed against the company's executives in the U.S. District Court for the Eastern District of Virginia, including Executive Chairman Michael Saylor, President and CEO Phong Le, and Executive Vice President and CFO Andrew Kang.
Strategy executives are accused of "violating Section 10(b) of the Securities Exchange Act of 1934 (as amended) (the 'Exchange Act') and Rule 10b-5 thereunder, as well as Section 20(a) of the Exchange Act." The document states:
"[The lawsuit claims] the named defendants made false and/or misleading statements regarding our Bitcoin-focused investment strategy and financial operations' expected profitability, as well as various risks associated with Bitcoin volatility, and/or failed to disclose relevant information."
Strategy's Bitcoin reserve strategy has inspired several other companies to follow suit. Last week, luxury watch manufacturer Top Win announced it would adopt a Bitcoin accumulation strategy and rebrand as AsiaStrategy, causing its stock price to surge over 60% in pre-market trading.
AsiaStrategy stated it is collaborating with Sora Ventures to implement its plan, a partner that previously co-created Japan's first corporate Bitcoin reserve with Metaplanet in 2024. Metaplanet currently holds more Bitcoins than El Salvador. Similarly, last week, a Bahrain-listed restaurant company with a market value of $24.2 million partnered with investment firm 10X Capital to adopt a Bitcoin reserve strategy.
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