The most aggressive corporate Bitcoin bet in history is now $10.6 billion underwater — and the lawyers have arrived.
Rosen Law Firm announced on 24 June that it has opened a formal securities investigation into Strategy Inc., the company formerly known as MicroStrategy, examining whether Michael Saylor’s bitcoin treasury operation fed investors “materially misleading business information.” The probe targets holders across Strategy’s entire capital stack — from MSTR common stock to the STRF, STRC, STRK, and STRD preferred shares — and is actively seeking a lead plaintiff.
The Numbers That Triggered the Probe
Strategy holds 847,363 BTC, acquired at an average cost of roughly $75,651 per coin — approximately $64.1 billion in total. With bitcoin trading near $59,300, that portfolio is now worth around $50.2 billion, leaving a staggering $10.6 billion unrealised loss on the books. MSTR stock dropped roughly 8% on 25 June to $86.15, its lowest level since February 2024, and is down 78% over the past year.
But it’s the preferred stock that tells the real horror story. STRC, the variable-rate preferred that Strategy marketed as a stable income product engineered to trade near its $100 par value, has crashed to approximately $76 — a 24% discount to par. Its effective yield has ballooned above 15%, which sounds generous until you realise it reflects the market’s growing scepticism that these dividends can survive a prolonged bear market.
The Flywheel in Reverse
Saylor’s entire strategy rested on a beautiful flywheel: issue shares at a premium to net asset value, use the proceeds to buy more bitcoin, watch bitcoin rise, repeat. When MSTR traded at a massive premium to its bitcoin holdings, this was practically printing money. Now the premium has compressed to near parity, and the engine has stalled.
A 22 June SEC filing revealed Strategy purchased just 520 BTC that week — using common stock alone, with zero preferred shares sold. Compare that to the thousands of bitcoin the company was hoovering up at its peak. The flywheel isn’t just slowing; it’s grinding backwards.
Annual dividend obligations have quadrupled since January 2026, rising from roughly $300 million to $1.2 billion. Cash reserves have fallen 38% this year to $1.4 billion. Dividend coverage has collapsed from over seven years to approximately 14 months. CryptoQuant has publicly urged Strategy to stop buying bitcoin entirely and rebuild its cash position to $2.8 billion.
Broken Promises and Shattered Trust
This isn’t the first time lawyers have come calling. Pomerantz filed a securities class action in 2025 targeting Strategy over its adoption of fair-value crypto accounting and a $5.91 billion quarterly loss. Robbins Geller is pursuing related claims. The Rosen investigation adds another front to what is becoming a legal siege.
“Saylor’s repeated pivots and deviations from his stated plans, alongside poor performance of STRC and MSTR, have broken that trust,” Alexander Blume, CEO of Two Prime, said on Thursday. It’s a damning assessment from within the industry.
Benchmark analyst Mark Palmer has offered a more measured take, arguing that STRC trading below par makes Strategy’s funding engine “less efficient, not broken.” But efficiency is a luxury when your cash runway is shrinking by the quarter and 80% of your preferred stock is held by retail investors who were sold on the promise of stable income.
What Happens Next
The uncomfortable truth is that Strategy’s $10.6 billion unrealised loss already exceeds the combined losses of FTX ($8.7 billion in customer funds) and Three Arrows Capital ($3.5 billion). The crucial difference — and Saylor’s only lifeline — is that these losses remain unrealised. He hasn’t sold. The 847,363 BTC are still sitting in Strategy’s wallets.
But unrealised losses have a nasty habit of becoming very real when creditors, regulators, and trial lawyers start circling simultaneously. If bitcoin doesn’t stage a meaningful recovery soon, the legal pressure alone could force liquidation at the worst possible moment.
The MSTR securities investigation is still in its early stages — Rosen is seeking a lead plaintiff, not filing suit. But the direction of travel is unmistakable. The man who told the world to “buy bitcoin and never sell” may soon face a courtroom full of investors asking why they listened.
This is a developing story. Strategy has not publicly responded to the Rosen investigation at the time of publication.
