Strategy Expands STRC Offering Twice in Two Weeks

     

Bitcoin-buying firm pushes new $4.2B stock sale as lawsuits over risk disclosures grow

Bitcoin treasury firm Strategy has expanded its STRC offering for the second time in just two weeks, raising eyebrows across financial and legal circles. The company, known for aggressively accumulating BTC via equity and debt instruments, is now offering up to $4.2 billion of its Variable Rate Series A Perpetual Stretch Preferred Stock (STRC) to finance further Bitcoin purchases.

Announced Thursday, the updated raise marks a sharp jump from the initial $500 million offering launched on July 22. STRC is a dividend-paying, perpetual corporate security pegged at $100 per share, offering flexible repayment terms and callable features.

Just two days after the initial launch, Strategy raised its target to $2 billion following an IPO directed at select investors. The company subsequently acquired over 21,000 BTC with the proceeds.

Strategy’s BTC-centric investment strategy, fueled by leverage and public equity, continues to divide market sentiment. Critics warn of systemic risks to the crypto space if such treasury-heavy plays unravel, while supporters view it as a bold financial innovation.

Investor lawsuits against Strategy pile up

While Strategy pushes forward with expanded offerings, a wave of class-action lawsuits threatens to challenge the firm’s disclosures around Bitcoin’s risks and potential returns.

Multiple law firms are now representing investors who allege Strategy misled them by downplaying Bitcoin’s volatility and overstating projected profitability. Some lawsuits argue the company used non-standard financial metrics to obscure losses.

“The company introduced several new KPIs – BTC Yield, BTC Gain, and BTC dollar Gain – that don’t align with traditional accounting standards,” reads one class action filing.

Legal experts remain divided on the cases’ merits, with some noting that the claims hinge more on omissions and tone than outright fraud. “It’s about overstatements and understatements, not complete fabrications,” said attorney Brandon Ferrick.

Amid the legal scrutiny, co-founder and executive chairman Michael Saylor defended the company’s strategy during its latest earnings call.

“We’re capitalized on the most innovative technology and asset in the history of mankind,” Saylor said. “On the other hand, we’re possibly the most misunderstood and undervalued stock in the US – and potentially the world.”