GD Culture’s Strategic Move to Boost Shareholder Value
In a strategic move to boost shareholder value, GD Culture, a publicly traded company specializing in artificial intelligence and livestreaming, has announced its plan to sell a portion of its Bitcoin reserves. The firm holds a significant 7,500 BTC, valued at approximately $518 million, which will help fund a new share repurchase initiative, the company detailed on Wednesday.
Share Repurchase Program
Earlier this month, GD Culture’s board of directors greenlit a program allowing for the repurchase of up to $100 million in the company’s shares (GDC) over the next half-year. This decision grants management the latitude to execute Bitcoin sales across multiple transactions as deemed beneficial for the firm and its investors.
Expected proceeds from these Bitcoin sales are earmarked specifically for stock buybacks within the framework of this repurchase plan. Although GD Culture is authorized to liquidate its entire Bitcoin inventory, it is not mandated to dispose of a fixed quantity, allowing for flexibility in its approach. The company retains the right to adjust or even halt this program as necessary.
Acquisition and Market Response
GD Culture’s acquisition of its 7,500 Bitcoin took place last September as part of a share agreement with Pallas Capital, marking a significant expansion of its digital asset portfolio. The company’s current Bitcoin holdings exceed five times the approved amount for share repurchases, providing ample cushion for strategic financial maneuvers.
Following the announcement, GD Culture’s share price experienced a surge of approximately 21%, recently trading at $4.04, despite facing a decline of more than 10% in the past month.
Industry Trends
This trend of leveraging cryptocurrency assets for share buyback initiatives isn’t unique to GD Culture. For instance, in October, ETHZilla, a firm backed by Ethereum, offloaded about $40 million in ETH to support its own share buybacks, triggered by stock trading below net asset values.
Additionally, other firms such as Riot Platforms and Cango have recently sold notable amounts of Bitcoin—$200 million and $305 million respectively—to finance tech-driven projects. Analysts suggest such moves are indicative of a growing trend among public companies to tap into digital assets for funding initiatives.
At the time of publishing, GD Culture had not provided further comments regarding this development to Decrypt.
