The international law firm Rosen Law Firm has formally launched an investigation into potential securities claims against Strategy—the company formerly known as MicroStrategy—and its co-founder Michael Saylor. The probe focuses on allegations that the firm may have provided materially misleading financial and business information to the investing public, particularly concerning its publicly traded securities under the tickers STRF, STRC, STRK, and STRD.
The investigation seeks to determine whether Strategy engaged in practices that violated U.S. capital market regulations. Rosen Law Firm said it is collecting testimonies and documentary evidence from shareholders who suffered significant losses after purchasing these securities. The firm’s analysis of public statements and quarterly reports suggests that omissions or inaccuracies in business performance data could have distorted the company’s financial reality during recent periods. A class action lawsuit is being evaluated, potentially allowing recovery for investors in both common stock and preferred securities.
Peter Schiff, a well-known critic of Bitcoin, publicly speculated that Michael Saylor’s recent media absence is no coincidence. On X, Schiff wrote, “My guess is that his lawyers advised him not to make any more public statements that could be used against him in shareholder lawsuits.” He also claimed CNBC may be limiting coverage of Strategy due to its prior airtime for Saylor, although neither Saylor nor CNBC has confirmed these assertions.
The legal pressure has intensified as STRC, Strategy’s perpetual preferred stock, plummeted to an all-time low near $73.62—about 25% below its $100 par value. This decline pushed the effective yield to approximately 15.6%, based on its 11.5% annual dividend rate on a $100 stated amount. Analysts noted Strategy has 104.89 million STRC shares outstanding, costing the firm roughly $1.2 billion per year in dividends, against a reported $1.4 billion in U.S. dollar reserves as of earlier this week.
Schiff argued the STRC drop signals investor doubts about the sustainability of dividends and Strategy’s ability to keep raising capital. He suggested that risk-averse retirees may have been misled into losses. Analytics firm Arkham, however, stressed that STRC is not akin to the LUNA death spiral: there is no forced liquidation mechanism that automatically erodes value. The real long-term risk, Arkham stated, is that if capital-raising weakens, future demand for MSTR and related securities could fade, straining the company’s Bitcoin-centric treasury model.
Strategy’s common stock has also tumbled alongside Bitcoin’s price near $58,000, with MSTR dipping below $85.50. Schiff proposed one way to create shareholder value would be for Strategy to sell Bitcoin and repurchase shares if the market price diverges too far from its per-share Bitcoin holdings. This directly conflicts with the company’s longstanding strategy of accumulating Bitcoin through equity, debt, and preferred share issuance. The ongoing debate now centers on whether Strategy can continue funding dividends and BTC purchases amid waning investor confidence.
