Capital B Expands Bitcoin Holdings
Capital B, a company listed on Euronext Growth Paris, has expanded its Bitcoin holdings by acquiring five additional BTC for a total of €280,000. This latest purchase increases their total cryptocurrency reserve to 3,145 BTC. The acquisition was facilitated through funding from equity issuance, as outlined in a release dated August 17, revealing that these units were purchased at an average price of €55,882 each. Overall, the firm has invested €284.2 million in its Bitcoin strategy, resulting in an average cost of approximately €90,352 per BTC.
Funding and Share Issuance
This acquisition followed a significant capital influx via a program akin to an Automated Teller Machine (ATM) agreement with French asset manager TOBAM, which netted the firm €301,460.25 through the issuance of 647,110 ordinary shares priced around €0.47 during the period from July 27 to August 7. This issuance price was pegged at a 3.52% premium relative to Capital B’s closing price on August 14.
Market Performance and Valuation
As of the last trading session, the company’s shares were valued at €0.454, indicating a drop of 2.72%. Earlier in the year, Capital B had made waves in the crypto market by purchasing 192 BTC in May, resulting in a total holding of 3,135 BTC at that time. At present, the company’s Bitcoin reserve holds a net asset valuation of €170.9 million, contrasting a considerable acquisition cost of €284.2 million, which suggests a deficit of about €113.3 million based on the Bitcoin market price referenced in the latest disclosure.
Operational Activities and BTC Yield
Notably, the firm has also earmarked another 61 BTC for operational activities, which are kept separate from their treasury and do not factor into its performance indicators. Year-to-date, Capital B has reported a BTC Yield of 2.14%, translating to a net gain of 60.3 BTC, equating to approximately €3.28 million. The company’s yield per fully diluted share has remained stable at 736.4 satoshis since August 3, though it is crucial to clarify that the term “BTC Yield” does not align with the conventional understanding of yield and does not directly correlate to returns on investment or operating income. Instead, it is intended to monitor changes in Bitcoin holdings per share.
Blockstream Capital Partners Update
In a concurrent update, it was revealed that Blockstream Capital Partners successfully converted 14,195,352 OCA B-01 instruments into 28,687,362 ordinary shares at a conversion price of €0.495, leaving no outstanding OCA B-01 instruments. Following the conversion, Blockstream now commands 21.74% of Capital B’s total equity, which constitutes 35.63% of the fully diluted shares. This strategic move followed shareholder approval in June for more than €100 billion in financing to underpin further Bitcoin purchases, signifying the company’s long-term goal of improving Bitcoin holdings on a per-share basis rather than merely inflating absolute Bitcoin counts.
Comparison with Other Corporate Bitcoin Holders
In contrast to Capital B’s growth strategy, the leading corporate Bitcoin holder, referred to as Strategy, has recently liquidated 3,328 BTC over two weeks until August 9, converting those assets into approximately $213.3 million. The funds raised were used to cover preferred stock dividends and stock repurchases, indicating a more active approach to capital management regarding their Bitcoin treasury. Capital B, however, maintains extensive financing capabilities for future acquisitions, having received shareholder consent for up to €5 billion in new capital increases and €100 billion in credit instruments, albeit such authorizations do not obligate the issuance of those amounts.
The forthcoming disclosures will shed light on whether this financing can bolster their Bitcoin per diluted share while the market valuation of existing reserves remains below their historical acquisition costs.
