Hong Kong Firm Bets $483 Million on Bitcoin – But Shareholders Could Pay the Price

The deal would push Ming Shing ahead of Buyaa Interactive International, which currently holds 3,350 BTC, according to BitcoinTreasuries.net.

CEO Wenjin Li said the move reflects the company’s belief that Bitcoin’s liquidity and long-term potential could strengthen its balance sheet.

A High-Stakes Bitcoin Treasury Bet

Unlike some firms that allocate existing cash reserves, Ming Shing plans to finance the purchase through convertible notes and warrants, not direct cash payments. Two British Virgin Islands-based firms are central to the deal: Winning Mission Group and Rich Plenty Investment.

Under the arrangement, Winning Mission will sell the 4,250 BTC in exchange for a $241 million convertible note and a warrant covering 201 million shares. Rich Plenty will receive the same package and issue a promissory note to Winning Mission for half of the Bitcoin.

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Massive Dilution Concerns for Shareholders

The structure could trigger one of the most aggressive shareholder dilutions seen in recent crypto-related corporate moves. Ming Shing currently has fewer than 13 million shares outstanding, but if all convertible notes are exercised, the share count could skyrocket to 415 million shares. In a worst-case scenario, with all notes, warrants, and interest converted, the figure could reach 939 million shares, leaving existing holders with as little as 1.4% ownership.

Despite these risks, Ming Shing’s stock initially surged to $2.15 following the announcement before retracing most gains. It currently trades at $1.65, still up more than 11% on the day after a 70% slide over the past year.

Hong Kong Pushes Deeper Into Crypto

The bold bet comes as Hong Kong cements its ambition to become a regional crypto hub. Regulators approved spot Bitcoin and Ethereum ETFs in April 2024, rolled out a stablecoin ordinance this year, and introduced the ASPIRe roadmap to guide regulation of digital assets.

Local financial institutions are also joining the wave. Earlier this week, reports surfaced that CMB International Securities, a subsidiary of one of China’s leading banks, had begun offering virtual asset trading in Hong Kong.

If completed, Ming Shing’s move would mark one of the largest Bitcoin treasury purchases in Asia, but also one of the riskiest, given the potential shareholder dilution.

The information provided in this article is for informational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.

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