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MicroStrategy Inc . (NASDAQ:MSTR), currently trading at $426.40 and showing remarkable returns of 148% over the past year, disclosed Wednesday that a class action lawsuit was filed against the company and its board of directors in the Delaware Court of Chancery on Monday. The suit alleges violations of the Delaware General Corporation Law and claims a breach of fiduciary duty by the board.According to InvestingPro analysis, MicroStrategy’s stock movements have been notably volatile, with the company currently appearing fairly valued based on comprehensive Fair Value calculations.
The plaintiff, David Dodge, is seeking to represent holders of MicroStrategy’s common stock. The complaint claims that under Section 242 of the Delaware General Corporation Law, common stockholders were entitled to vote on a Certificate of Amendment related to the company’s 8.00% Series A Perpetual Strike Preferred Stock (trading as STRK on the Nasdaq Global Select Market).
According to the filing, the amendment modified certain terms of the STRK preferred stock, including changes so that the liquidation preference per share approximates its trading price, subject to a floor of $100. The complaint seeks a court order declaring that MicroStrategy violated Section 242, that the board breached its fiduciary duties, and requests the amendment be deemed ineffective. The plaintiff also asks the court to require MicroStrategy to file a certificate of correction invalidating the amendment and seeks unspecified damages, interest, attorneys’ fees, and other relief.
MicroStrategy stated it cannot predict the outcome of the case or estimate potential losses at this time.
This information is based on a press release statement contained in the company’s Form 8-K filing with the Securities and Exchange Commission.
In other recent news, Strategy announced its intention to conduct an initial public offering of 5 million shares of its Variable Rate Series A Perpetual Stretch Preferred Stock, with the proceeds earmarked for general corporate purposes, including bitcoin acquisition. Additionally, Strategy has launched a $4.2 billion at-the-market offering of its 10.00% Series A Perpetual Stride Preferred Stock, planning to execute sales based on trading conditions. MicroStrategy, a notable player in the cryptocurrency space, reported updates on its ATM offering programs and bitcoin holdings, revealing the sale of 797,008 shares of its Class A common stock, generating $330.9 million in net proceeds.
In another development, TD Cowen raised its price target for Strategy to $680 from $590, maintaining a Buy rating, citing the company’s position as the largest corporate holder of bitcoin. This comes as crypto-linked stocks saw a rise after President Donald Trump signed a bill regulating stablecoins, marking a significant regulatory step for the cryptocurrency industry. These developments indicate a series of strategic moves by Strategy and its affiliates in the financial markets.
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