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BTC Treasury Firms Face Value Erosion, VanEck Director Warns

  • Bitcoin-holding public firms are facing risks of shareholder dilution as their stock approaches or falls below Bitcoin net asset value (NAV).
  • ATM issuance near NAV can erode shareholder value instead of building capital, according to a VanEck director.
  • To prevent dilution similar to crypto mining sector errors, Sigel suggests safeguards like halting ATM issuance below 0.95x NAV for 10+ sessions and focusing on buybacks during Bitcoin price increases.
  • Strategic reviews including mergers, spinoffs, or abandoning BTC strategy are proposed if discounts persist.
  • Executive compensation tied to NAV per share growth is recommended to align interests.
  • Boards are advised to take proactive steps to preserve value and protect shareholders as BTC exposure may backfire.
  • VanEck director emphasizes the importance of acting now while there are still premiums.
  • Bitcoin treasury firms should prioritize protecting shareholder value and options by halting dilution and considering strategic alternatives.
  • Sigel suggests tying executive compensation to NAV per share growth for better alignment of interests.
  • Boards should take preventive measures to safeguard shareholder value and avoid negative impacts of BTC exposure.

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