Strategy, Billionaire Saylor Sued Over Preferred Stock Changes

Cryptocurrency pioneer Strategy illegally raised the liquidation preference on its preferred stock without a vote by investors pushed further from a recovery if the company becomes insolvent, according to a lawsuit filed Tuesday.

A shareholder is suing billionaire co-founder Michael Saylor, other board members, and the business, which bills itself as the world’s “first and largest Bitcoin treasury.” Strategy failed to get stockholder approval before bumping up the payout preference of its “perpetual strike” shares, which have surged beyond their original liquidation value of $100, the suit says.

The move—redefining $100 as a price floor—means common investors won’t see ...