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MicroStrategy, now rebranded as Strategy, is under fire for allegedly misleading investors by comparing its P/E ratio to S&P 500 firms like Apple and NVIDIA. Critics argue the firm misrepresented its earnings as recurring when they were driven by Bitcoin’s volatile market value. The controversy has sparked class action lawsuits and raised concerns about the company’s financial disclosures.
- Strategy's P/E ratio comparison to S&P 500 firms like Apple and NVIDIA has been criticized as misleading, with earnings driven by Bitcoin's volatile market value rather than recurring revenue.
- The company faces class action lawsuits alleging securities fraud over its Bitcoin treasury strategy, with plaintiffs claiming false and misleading statements about profitability.
- Under updated GAAP rules, Strategy now records Bitcoin holdings at fair value, exposing it to significant quarterly swings—raising concerns about sustainability if Bitcoin prices decline.
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