Rosen Law Firm launches investigation into Strategy: what lies behind the stock decline and risks for investors
The law firm Rosen Law Firm has launched an investigation into Strategy (formerly MicroStrategy) and is inviting investors who purchased the issuer's securities to join a potential class action lawsuit. This development has already caused notable market resonance, especially amid the recent volatility of instruments tied to Michael Saylor's bitcoin strategy.
Attorneys are examining whether Strategy and its management published misleading statements about the business, bitcoin storage strategy, profitability, and risks associated with the aggressive accumulation model of the leading cryptocurrency. The investigation covers several types of securities: MSTR, STRF, STRC, STRK, and STRD. A dedicated page has been created for affected investors to join the proceedings.
Investigation Details and Market Reaction
The most attention has been drawn to STRC — Strategy's perpetual preferred stock. Its value has sharply declined, sparking rumors of a potential collapse similar to the Terra ecosystem crash. However, analytics platform Arkham was quick to refute these parallels, pointing out fundamental differences in price support mechanisms.
Unlike Terra LUNA, Strategy has no legal obligation to maintain the market price of STRC. The algorithmic stabilization mechanisms that played a fatal role in Terra's collapse are absent here. Saylor cannot lose funds due to a drop in STRC, and its value merely reflects market confidence in continued dividend payments. The key point: Strategy is not legally required to pay these dividends, and if issues arise, priority may be given to other obligations.
According to Arkham's calculations, maintaining the current payout order for STRC requires approximately $1.2 billion per year. This burden calls into question the sustainability of the company's financial model amid market weakness.
Expert Opinion: Not So Clear-Cut
Prominent analyst Shanaka Anslem pushed back against interpreting Rosen Law Firm's statement as evidence of fraud. He emphasized that this is a typical method for law firms to seek clients after a sharp stock decline, rather than a sign of proven violations. "There is no SEC lawsuit, no DOJ case. No complaint has been filed, no specific misrepresentations of fact," he noted.
Nevertheless, questions about the sustainability of Strategy's financial model remain. The company's ability to sustain dividend payments and maintain its bitcoin strategy during periods of market weakness is a critical factor for long-term investors. As of now, neither Strategy nor Michael Saylor have commented on the investigation.
My analysis: The Rosen investigation is not a verdict, but rather a signal to the market that the regulatory and legal shadow over Strategy's model is growing longer. Investors in STRC and other company instruments should closely monitor developments: even if no direct violations are found, uncertainty alone can exert pressure on valuations.