[8-K] MicroStrategy Incorporated 8.00% Series A Perpetual Strike Preferred Stock Reports Material Event

Rhea-AI Filing Summary

MicroStrategy Incorporated, in a Form 8-K dated June 23 2025, reported that a shareholder derivative action was filed on June 19 2025 in the U.S. District Court for the Eastern District of Virginia. Plaintiff Abhey Parmar names the Company as nominal defendant and targets current and former officers/directors Michael J. Saylor, Phong Q. Le, Stephen X. Graham, Andrew Kang, Jarrod M. Patten, Carl J. Rickertsen, and Leslie J. Rechan.

The suit alleges breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, waste, and contribution. Core allegations mirror the earlier Hamza securities litigation: that management issued or failed to correct false statements regarding (i) the adoption of ASU 2023-08 governing crypto-asset accounting, (ii) bitcoin price volatility risks, and (iii) profitability of MicroStrategy’s bitcoin-centric treasury strategy. The complaint further claims the Company lacked adequate internal controls and that Messrs. Le, Kang, Graham, and Rechan engaged in insider sales between April 30 2024 and April 4 2025.

• Potential exposure: No estimate of loss or outcome is presently available.
• Company stance: MicroStrategy states it will “vigorously defend” against all claims.

No other material developments, financial metrics, or operational impacts were disclosed in this filing.

Positive

• None.

Negative

• Shareholder derivative lawsuit filed alleging fiduciary breaches, unjust enrichment, and mismanagement.
• Claims of false or misleading disclosures related to crypto-asset accounting and bitcoin strategy risks.
• Alleged insider selling by four executives between April 2024 and April 2025.
• Unquantified financial exposure; company unable to estimate potential loss.

Insights

Litigation Risk Analyst

TL;DR New derivative suit heightens legal overhang; outcome uncertain, potential governance and financial risk.

This filing adds a derivative action to MicroStrategy’s existing litigation docket, broadening exposure from securities class-action allegations to fiduciary and insider-trading claims. Although the company disclaims an ability to quantify loss, such suits typically seek monetary damages and corporate governance reforms, potentially leading to higher legal expenses and management distraction. Allegations tied to crypto-asset accounting and insider sales could attract regulatory attention and erode investor confidence, especially as bitcoin volatility remains central to the firm’s strategy. Absent settlement clarity, the market may apply a litigation discount to the equity.

Corporate Governance Expert

TL;DR Alleged fiduciary breaches and insider sales raise governance red flags for MicroStrategy’s board.

The complaint strikes at core governance duties—truthful disclosure, oversight of internal controls, and avoidance of self-dealing. Insider-sale allegations against four executives, if substantiated, could imply misuse of material non-public information. While derivative suits often settle without admission of guilt, they commonly impose policy changes, board reforms, or monitoring provisions. Investors should watch for board responses, possible director insurance use, and any SEC inquiries triggered by overlapping accusations. Until resolved, board credibility and shareholder trust may remain pressured.

false0001050446MICROSTRATEGY Inc00010504462025-06-162025-06-16

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 19, 2025

MICROSTRATEGY INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware		001-42509		51-0323571
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

1850 Towers Crescent Plaza Tysons Corner, Virginia		22182
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (703) 848-8600

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol		Name of Each Exchange on which Registered
Class A common stock, par value $0.001 per share		MSTR		The Nasdaq Global Select Market
8.00% Series A Perpetual Strike Preferred Stock, $0.001 par value per share		STRK		The Nasdaq Global Select Market
10.00% Series A Perpetual Strife Preferred Stock, $0.001 par value per share		STRF		The Nasdaq Global Select Market
10.00% Series A Perpetual Stride Preferred Stock, $0.001 par value per share		STRD		The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 8.01 Other Events.

On June 19, 2025, a shareholder derivative suit was filed in the U.S. District Court for the Eastern District of Virginia against MicroStrategy Incorporated d/b/a Strategy (the “Company”) officers and/or directors Michael J. Saylor, Phong Q. Le, Stephen X. Graham, Andrew Kang, Jarrod M. Patten, Carl J. Rickertsen, and former director Leslie J. Rechan, and against the Company as nominal defendant. The plaintiff, Abhey Parmar, purports to assert claims on behalf of the Company against the individual defendants for breaches of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, waste, and contribution. The complaint makes claims based on factual allegations similar to those asserted in the Hamza securities litigation, which the Company disclosed in its Current Report on Form 8-K filed on May 19, 2025, namely that the individual defendants caused or allowed the Company to make false or misleading disclosures or omissions, and failed to correct such false or misleading disclosures or omissions, concerning the risks and financial impact associated with the Company’s adoption of Accounting Standards Update No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets, the risks associated with bitcoin’s volatility, and the profitability of the Company’s bitcoin-driven strategy and treasury operations. The complaint also alleges the individual defendants caused the Company to fail to maintain adequate internal controls, and that four of the defendants—Messrs. Le, Kang, Graham, and Rechan—allegedly engaged in insider selling because they sold shares of the Company’s stock at various times from April 30, 2024 to April 4, 2025. We intend to vigorously defend against these claims. At this time, we cannot predict the outcome, or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: June 23, 2025				MicroStrategy Incorporated (Registrant)
				By:		/s/ W. Ming Shao
				Name:		W. Ming Shao
				Title:		Executive Vice President & General Counsel

FAQ

What event did MicroStrategy (MSTR) disclose in its June 23, 2025 Form 8-K?

The company reported a shareholder derivative lawsuit filed on June 19 2025 against several current and former officers and directors.

Who are the defendants named in the derivative suit against MicroStrategy?

Michael J. Saylor, Phong Q. Le, Stephen X. Graham, Andrew Kang, Jarrod M. Patten, Carl J. Rickertsen, and Leslie J. Rechan.

What are the primary allegations in the MicroStrategy derivative lawsuit?

Breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, waste, contribution, and insider selling.

Does MicroStrategy provide an estimate of potential financial loss from the lawsuit?

No. The company states it cannot predict the outcome or provide a reasonable estimate or range of potential losses at this time.

How does the derivative suit relate to prior litigation disclosed by MicroStrategy?

It echoes factual allegations from the Hamza securities litigation regarding misleading crypto-asset disclosures and bitcoin-related risks.