GD Culture Shares Drop 28% After Bitcoin Acquisition Deal With Pallas Capital

Shortly after GD Culture Group (GDC) made a Bitcoin BTC $116 142 24h volatility: 0.8% Market cap: $2.31 T Vol. 24h: $43.26 B acquisition deal with Pallas Capital, its shares fell by about 28%.

This has been designated the largest fall that the shares have experienced over the last 12 months. Google Finance data showed that there was a slight recovery of 3.7% in pre-market trading.

GD Culture Sells Shares to Acquire 48 Bitcoin

According to Google Finance, shares in GD Culture Group fell 28.16% on September 16 to hit $6.99. This became the GDC’s largest fall in over 12 months, triggering a notable sink in its market cap to $117.4 million.

Unfortunately, the dip positioned the company at 97% off its all-time high (ATH) of $235.80, which it recorded on February 19, 2021.

A new Bitcoin acquisition deal may have “set off the alarm” on the share price drop. The livestreaming company had made a strategic deal to swap tens of millions of its shares to acquire 7,500 BTC from Pallas Capital.

GD Culture plans to issue roughly 39.2 million shares of its common stock and exchange them for all of Pallas Capital’s assets.

Among Pallas’ assets is $875.4 million worth of Bitcoin. Xiaojian Wang, the CEO and Chairman of GD Culture, acknowledged that this deal will “directly support” its plan to build a “strong and diversified crypto asset reserve.”

He also said it would play a role in positioning the firm to benefit from growing institutional acceptance of BTC as a reserve asset and store of value.

The decline in GDC price is not entirely surprising, especially because dilution of the company’s shares often fuels market reactions. It usually results in the ownership percentage among existing shareholders being reduced. The company is not perturbed by this setback as it plans to buy more Bitcoin by selling its common stock.

Growing Numbers of Bitcoin Treasury Companies

As the deal finally pulled through, GD Culture has now joined a trend of firms that have been busy buying up cryptocurrency. More precisely, it is the 14th largest publicly listed Bitcoin holder, while Michael Saylor’s Strategy remains at the top.

By a significant percentage, the number of Bitcoin treasury companies has increased this year.

A few days ago, Capital B confirmed the completion of multiple fundraising rounds to acquire 48 BTC worth approximately $5.6 million, in three tranches. This is Europe’s first Bitcoin treasury company listed on Euronext Growth Paris.

The company first finalized a capital increase at $2.03 per share, raising $2.12 million. These proceeds went into the purchase of 17 BTC valued at $2 million.

The second round was priced at $1.99 per share and raised $2.94 million. It was fully subscribed by the TOBAM Bitcoin Alpha Fund and was for the acquisition of 24 BTC worth $2.82 million.

Lastly, Fulgur Ventures subscribed to 1.25 million ordinary shares at $0.64 per share. This summed up to $824,000 and was directed to the acquisition of 7 BTC.

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