"Public companies making large-scale Bitcoin purchases should halt indiscriminate equity issuance"
Summary
- Public companies that have been acquiring large amounts of Bitcoin (BTC) are urged to review future Bitcoin purchases more cautiously as the gap between share price and net asset value (NAV) is narrowing.
- A VanEck crypto researcher emphasized that further share issuance (equity offering) should be halted when the share price is at or below NAV.
- In fact, some listed companies such as Semler (SMLR) face growing concerns about value dilution due to a sharp drop in their share price and repeated issuance of shares and bonds.
An analysis has indicated that listed companies that have been purchasing Bitcoin (BTC) in large volumes should consider Bitcoin acquisitions more conservatively as the gap between share price and net asset value (NAV) is narrowing rapidly.
According to Cointelegraph on the 16th (local time), Matthew Sigel, a VanEck crypto researcher, stated, "When the share price is trading at or below NAV, additional share issuance should be halted."
Sigel stated via his X (formerly Twitter), "Some companies acquiring Bitcoin are raising capital to purchase BTC through large-scale at-the-market equity issuance, where publicly listed companies issue new shares and sell them bit by bit on the open market to raise funds," cautioning, "If the shares are trading at or near NAV, continued share issuance can cause value dilution."
In reality, medical technology company Semler Scientific (SMLR) holds the 13th largest amount of Bitcoin among listed firms (3,808 BTC, approximately $400 million), but its share price has plunged by more than 45% this year, causing its market capitalization to drop to a level nearly identical to its NAV (0.821 times). Semler has repeatedly issued shares and bonds to raise capital for Bitcoin purchases.
Heecheol Yang
heecheol@bloomingbit.ioHello, I'm a reporter at bloomingbit
