Key Takeaways
- MicroStrategy recently adjusted the terms of its Perpetual Strike Preferred Stock.
- In the event of a liquidation, STRK holders will be paid out based at the market rate.
- However, a class action lawsuit filed on behalf of stockholders seeks to reverse the change.
On July 7, Strategy (formerly MicroStrategy) modified the terms of its Perpetual Strike Preferred Stock (STRK).
However, a class action lawsuit is seeking to reverse the amendment, arguing that holders of Strategy’s common stock were not granted their legal rights to vote on the changes.
What Did Strategy Change in STRK Terms?
The main modification to STRK terms Strategy introduced was a change to its liquidation preferences, i.e., the rules that determine how proceeds from the sale or liquidation of a company are distributed among different classes of shareholders.
Previously, STRK’s liquidation price was set at a flat $100 per share. However, under the new terms, shareholders will receive the highest of: $100, the prior-day closing price if any STRK was issued within the previous 10 trading days, or the ten-day average closing price.
This adjustment aligns the liquidation value of STRK shares more closely with their actual market price, preventing investors from receiving less than market value upon liquidation.
Implications for Common Stockholders
The changes to STRK preferred stock terms could negatively affect common shareholders.
Before the change, STRK preferred shareholders had a fixed $100 per share liquidation preference. This capped their claim on company assets in a wind-down or sale.
As a result, in the event of liquidation or sale, more company assets would be paid out to STRK holders before common shareholders get anything. This reduces the residual value available to common shareholders.
The Lawsuit
On July 21, 2025, a class action lawsuit was filed in a Delaware business court by plaintiff David Dodge on behalf of himself and similarly situated holders of Strategy common stock, the company revealed in a July 22 filing.
Pursuant to Section 242 of the Delaware General Corporation Law, holders of Strategy common stock were entitled to vote on the filing of a Certificate of Amendment, the lawsuit alleges.
The complaint seeks an order reversing the amendment and declaring that Strategy’s board breached its fiduciary duties. It also seeks unspecified damages, including interest, attorneys’ fees, costs, and other relief.
“At this time,” Strategy said, “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.”
James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
