Quote from: JayJuanGee on May 20, 2025, 05:23:37 PM

Quote from: takuma sato on May 20, 2025, 03:04:09 PM

Quote from: JayJuanGee on May 20, 2025, 01:46:17 AM

Even though I believe that the Class Action lawsuit filed against Strategy last week is a big nothing burger, I am a little surprised no one has mentioned it.

Quote

According to the complaint, during the class period, defendants failed to disclose that: (i) the anticipated profitability of the Company's bitcoin-focused investment strategy and treasury operations was overstated; (ii) the various risks associated with bitcoin's volatility and the magnitude of losses Strategy could recognize on the value of its digital assets following its adoption of ASU 2023-08 were understated; and (iii) as a result, Defendants' public statements were materially false and misleading at all relevant times.

https://www.prnewswire.com/news-releases/mstr-shareholder-alert-robbins-llp-informs-investors-of-the-microstrategy-incorporated-dba-strategy-class-action-lawsuit-302459505.html

While there are many reasons to fill a class action lawsuit against corporations like Google for their abuse of monopoly, vague enforcement of "Community guidelines", opaque moderation decisions and so on, when it comes to Strategy, there are no legal grounds that I can think of to sue Michael Saylor for running a Bitcoin treasury company while not expecting volatility.

The US has fairly liberal standards for filing legal claims, and surely the claim does not need to win in order to be valid, but instead there needs to be a colorable claim at the time of the filing, which is a possibility to win and that the claim is not being brought merely to harass or as a frivolous claim that does not have any arguable merit.

Surely many times claims will get dismissed on summary judgement or even fairly early in the case when it might start to become apparent that there is no way to win the claim, yet parties still have rights to bring claims, and even on the face of the claim, it has to allege some kinds of behaviors that could potentially be unlawful, and sophisticated law firms are going to at least be able to make colorable claims that at least appear that they could have some possible violations of the law, especially since none of them want to be in trouble for filing claims that are not even colorable, appear to be frivolous or for malicious and/or harassing purposes.

Summary judgements come ONLY after figuring out if there are any facts in dispute, so surely after the initial filing, there may be some further filings and/or pleadings that allege facts that would be presented at trial, and a defendant could end up filing for summary judgement to proclaim that even if all of the alleged facts were to be proven in trial, the case is still legally insufficient for the plaintiff to prevail. So plaintiffs do have opportunities to present their claims, even if their cases might end up getting dismissed early... and surely there are also cases that might seem to be meritless from the beginning, but they are able to survive the process and sometimes end up winning after the facts are fleshed out.. perhaps prior to trial or within the context of a trial.. and yeah, more than 95% of cases that are filed never make it to trial in the first place.. so they will get resolved in the process - sometimes with a judgement and other times with some kind of a settlement.. and class action law firms and cases are already widely known in the USA as an abusive kind of lawsuit, since they sometimes will seek settlements on behalf of the class, so then the attorneys can make a lot of money on those kinds of cases, especially if they can settle early.

Quote from: takuma sato on May 20, 2025, 03:04:09 PM

Saylor has been repeating a million times that they work with volatility, and the people that are filling the lawsuit did probably unfortunately buy at the very top of the speculative mania where the options market had created a gamma squeeze. Those people are the same ones that bought Bitcoin at the top of a bubble, held all the way down and eventually capitulated locking in losses, then became Bitcoin haters, only to see Bitcoin 10x+ from there. Some people just cannot deal with volatility which is a must in Bitcoin and specially Strategy.

I agree that their claims come off as barely colorable, since Saylor is quite transparent with what he is doing, and it seems doubtful that Saylor is making material and/or significant misrepresentations.. but yeah, sure, let's see how long the claim lasts or whether it just disappears off of the scene after a month or two.

A lot of corporations, specially in big tech, abuse their TOS to fill it up with all sort of overreaching rights over their users, and users are right in many instances, the problem is, these corporations use really expensive lawyers, and so people are scared to go on and scale things up even if they know they are right, so in many cases they do nothing, and it may take someone with deep pockets or the state prosecuting them for their wrongdoings. While the state and regulations can sometimes be too much, when it comes these corporations, regulations are necessary. Now when it comes to this class action, it's difficult to say, they may be able to find so some tweets from Saylor and paint if off as overhyping his own stock. While Saylor pumping BTC is legal since it's a commodity, MSTR is it's own stock, but I think anyone reasonable knows that the context of these tweets isn't telling you to literally go all on their stock. They are just promoting their stuck in a positive way just like a car salesman promotes their own cars as safe and reliable. The difference is, a stock may be very volatile and this is advertised, however, if Tesla ships some car that is trash, then they should cover these damages, and if they refuse then they can get sued and will need to reimburse the owner. This is not the case with financial products if the risks are covered, and the risks are well covered on the SEC fillings and so on.