Why are so many companies calling for a strategy surrounding Bitcoin Holding?

The Bitcoin Juggernaut Strategy faces at least five copycat lawsuits accusing BTC of securities fraud regarding the Treasury Department, telling two law professors Decryption The number of suits is not uncommon.

The law firm is trying to lead a consolidated class action lawsuit. In such cases, they often submit separate submissions until the judge names the main plaintiffs and combines separate actions.

“The law firm has established itself as lead lawyers in securities class actions,” said Professor Adam Pritchard, a professor at the University of Michigan Law School.

Each lawsuit denies investors’ strategies that mislead the expected profitability and risk of Bitcoin purchases by creating official statements that are “substantially false and misleading.” They claim that the fraud occurred in the 11 months from April 30, 2024 to April 4, 2025.

The first class lawsuit was filed by Pomerantz LLP on May 16th, but the same lawsuit was filed by Gross Law Firm, Bronstein, Gewirtz & Grossman, Kessler Topaz Meltzer & Check, Levi & Korsinsky, rather than taking part in the first class lawsuit.

None of the five law firms responded to repeated requests for comments Decryption.

“The position of the Chief Plaintiff is valuable,” said Anne Lipton, a law professor at the University of Colorado. Decryption. “The main plaintiff will manage the case and select an attorney who will ultimately become a class counsel. Therefore, if the case appears strong, multiple companies and plaintiffs will file a complaint to throw their hats into the ring.”

Lipton and Pritchard said that law firms submit the same suit in such cases and submit themselves as the right company to promote themselves as the right company.

Plaintiffs’ main strategies

Each of the five companies has sent multiple press releases to attract more plaintiffs. Many of them are prominent reminders of potential participants of the July 15 deadline, when judges choose key plaintiffs. Once that happens, the remainder of the plaintiff will be consolidated under that plaintiff’s class action lawsuit.

However, the law firm does not just want many plaintiffs. Puchard explained that they want to secure the largest investor possible. That’s because the Private Securities Litigation Reform Act of 1995 says that the court should award a spot of the main plaintiff to someone who volunteered to assume the role. and There is the biggest loss.

“The theory is that plaintiffs with more skins in the game will oversee the case and the lawyer,” Lipton said. “Institutions are also preferred, as they are likely to provide the necessary surveillance.”

It is not yet clear whether any of MSTR’s biggest holders have signed to become plaintiffs in competing class actions. As of SEC filing in October, strategy co-founder and executive director Michael Saylor is the single largest shareholder with 19,998,580 shares worth almost $7.8 billion with a current MSTR price of $389.50.

However, there are large institutions that include 4.7% stake in the company, including Vanguard Group, BlackRock, and Capital International Investors, with 5.8% stake each, and Susquehanna Ext, and Jane Street Group, with 4.8% stake in the company.

According to Bitcointreasuries.net, the strategy’s value of 592,345 BTC has recently exceeded $63 billion. A litigation frenzy began after warning investors in April that they were unlikely to report first quarter profits as they had an unrealized loss of nearly $6 billion in BTC holdings.

In a SEC filing, the company said, “It may not be possible to regain profitability in future periods, particularly if a material unrealized loss is suffered related to digital assets.” The company continued to report a decline of $16.49 per common stock in the first quarter.

In early April, the company’s 528,185 Bitcoin was worth around $41.3 billion. The strategy spent a whopping $7.7 billion buying BTC in the first quarter, with an average price of $95,000 per coin. But by the time the company had to file its first quarter revenue report, the price of BTC had sunk to around $82,000 per coin. It then rebounded to around $107,000 at the time of this writing.

The company did not immediately respond to requests for comment Decryption. However, he has granted the lawsuit in filing 8-K with the SEC.

In each, “We intend to vehemently defend these claims. At this time, we cannot predict outcomes or provide estimates or estimates of possible outcomes or losses in this issue.”

Edited by James Rubin