KindlyMD Files $5B Stock Offering to Expand Bitcoin Holdings

TLDR

• KindlyMD filed a $5 billion equity offering program to increase its Bitcoin holdings
• The company recently purchased 5,744 BTC for $679 million at an average price of $118,204 per Bitcoin
• NAKA shares dropped 12% following the announcement, but are still up 330% since May
• CEO David Bailey, a crypto policy adviser to the Trump administration, called this the “natural next phase” of their growth plan
• The filing establishes KindlyMD as a Well-Known Seasoned Issuer, allowing more flexible capital market access

KindlyMD, a healthcare company that has embraced a Bitcoin treasury strategy, announced on Tuesday that it filed with the US Securities and Exchange Commission for a $5 billion at-the-market equity offering program. The primary purpose of this offering is to fund the expansion of its Bitcoin holdings.

The company’s shares reacted negatively to the news, dropping 12% on Tuesday and falling an additional 2.7% in after-hours trading to $7.85. Despite this recent decline, KindlyMD stock has seen a dramatic rise of 330% since early May when the company first announced its Bitcoin strategy plans. Overall, the stock is up 550% year-to-date.

The healthcare services company recently completed a merger with Nakamoto Holdings just two weeks ago. Following the merger, KindlyMD made its first Bitcoin purchase, acquiring 5,744 BTC for approximately $679 million at a weighted average price of $118,204 per Bitcoin on August 19.

David Bailey, KindlyMD’s chair and CEO who also serves as a crypto policy adviser to the Trump administration, described the equity offering as “the natural next phase of our growth plan.”

Bailey addressed the timeline for the offering on social media platform X, stating, “It’ll take us a while to build the necessary liquidity to complete the program, but it’ll be a critical tool as we execute our strategy.”

When questioned about the transparency of KindlyMD’s approach compared to that of Michael Saylor’s strategy at MicroStrategy, Bailey responded: “We want to be world-class at transparency and governance, we have a lot of immediate items that must be prioritized but over the course of the year we will dramatically improve here.”

Corporate Bitcoin Adoption Grows

The filing establishes KindlyMD as a Well-Known Seasoned Issuer, a designation that provides the company with more flexibility in accessing capital markets. The stock sales will be conducted through multiple sales agents, including TD Securities, Cantor, and others, with shares sold at prevailing market prices on exchanges such as Nasdaq.

In its SEC filing, KindlyMD clearly stated its intentions: “Bitcoin will serve as our primary treasury reserve asset, and we are focused on accumulating a long-term Bitcoin position.”

The company plans to use the proceeds from the offering for general corporate purposes, including Bitcoin accumulation, working capital, acquisitions, capital expenditures, and investments in projects.

KindlyMD is not alone in adopting Bitcoin as part of its corporate strategy. Red Light Holland, a Canada-based psychedelic truffles farming company, also announced on Tuesday that it has purchased 10,600 shares of the BlackRock iShares Bitcoin Trust ETF (IBIT).

Market Impact Considerations

The trend of Digital Asset Treasuries (DATs) has been growing since “the approval of U.S. Bitcoin ETFs in early 2024,” according to Kelvin Koh, co-founder and CIO at Asia-based venture capital firm Spartan Group.

Koh noted that these events have “normalized crypto exposure” and “opened the door for altcoin-focused digital asset treasuries.”

However, some analysts express concern about the potential market impact of this trend. Koh co-authored a research paper suggesting that while DATs bring significant liquidity to the assets they target, this might come “at the expense of the wider altcoin market.”

The paper also warns that DATs rely heavily on raising equity to buy crypto, giving them high exposure to volatility that could affect capital availability.

“When hundreds of firms pursue the same strategy, the market structure becomes fragile,” Koh cautioned.

Jay Jo, senior analyst at Tiger Research, pointed out that while the Well-Known Seasoned Issuer status “clearly gives a company an advantage in capital raising,” it also imposes pressure “due to the large issuance volumes and high market volatility risks.”

The most recent development in KindlyMD’s Bitcoin strategy is the $5 billion equity offering filing, which will enable the company to continue building its Bitcoin position over time as it implements its corporate treasury reserve strategy.

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