Gate News bot message, VanEck Crypto Assets Research Director Matthew Sigel recently posted on X to warn about the Bitcoin accumulation strategy of listed companies. Sigel stated that if the stock prices of these companies fall significantly, they should abandon the BTC strategy.
Sigel urged major platforms to reevaluate their strategies, stating: "This may include merging, splitting, or terminating BTC strategies." He also asserted that a well-known company is approaching a critical point.
He wrote: "So far, no publicly listed BTC asset management company's stock price has consistently fallen below its Bitcoin asset net value (NAV). However, at least one company is now approaching this level. As some companies raise funds to buy BTC through ATM programs, a risk is emerging: if the stock trading price reaches or approaches NAV, the continuous issuance of stocks may dilute rather than create value."
It is worth noting that Sigel recommends that companies holding Bitcoin link executive compensation to the growth of net asset value per share, rather than to their Bitcoin holdings or the number of shares. He emphasized that rigorous decision-making is crucial while the company still has strategic flexibility. Sigel added, "Once traded at NAV, shareholder dilution no longer has strategic significance, but rather extractive significance."
In addition, Sigel recommends that companies adopting Bitcoin financial strategies take protective measures to reduce potential risks:
Suspend ATM issuance: If the stock price remains below 0.95 times the net asset value (NAV) for an extended period (for example, more than 10 trading days), the ATM issuance should be suspended;
Stock repurchase priority: When the price of Bitcoin surges but the company's stock price fails to rise in sync, stock repurchase can be prioritized.
Strategic assessment: If there is a persistent discount in net asset value, an evaluation should be conducted, and options such as mergers, spin-offs, or halting the Bitcoin strategy may be explored.
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VanEck executives: The company should weigh abandoning its Bitcoin strategy in the case of a big dump in its stock price.
Gate News bot message, VanEck Crypto Assets Research Director Matthew Sigel recently posted on X to warn about the Bitcoin accumulation strategy of listed companies. Sigel stated that if the stock prices of these companies fall significantly, they should abandon the BTC strategy.
Sigel urged major platforms to reevaluate their strategies, stating: "This may include merging, splitting, or terminating BTC strategies." He also asserted that a well-known company is approaching a critical point.
He wrote: "So far, no publicly listed BTC asset management company's stock price has consistently fallen below its Bitcoin asset net value (NAV). However, at least one company is now approaching this level. As some companies raise funds to buy BTC through ATM programs, a risk is emerging: if the stock trading price reaches or approaches NAV, the continuous issuance of stocks may dilute rather than create value."
It is worth noting that Sigel recommends that companies holding Bitcoin link executive compensation to the growth of net asset value per share, rather than to their Bitcoin holdings or the number of shares. He emphasized that rigorous decision-making is crucial while the company still has strategic flexibility. Sigel added, "Once traded at NAV, shareholder dilution no longer has strategic significance, but rather extractive significance."
In addition, Sigel recommends that companies adopting Bitcoin financial strategies take protective measures to reduce potential risks:
Suspend ATM issuance: If the stock price remains below 0.95 times the net asset value (NAV) for an extended period (for example, more than 10 trading days), the ATM issuance should be suspended; Stock repurchase priority: When the price of Bitcoin surges but the company's stock price fails to rise in sync, stock repurchase can be prioritized. Strategic assessment: If there is a persistent discount in net asset value, an evaluation should be conducted, and options such as mergers, spin-offs, or halting the Bitcoin strategy may be explored.
Source: CoinGape