On Monday, shares in the healthcare-focused Bitcoin holdings company KindlyMD Inc. saw a dramatic drop, halving in value as its CEO warned of impending “share price volatility” and advised short-term traders to sell if solely seeking profit.
David Bailey stated in a shareholder letter that “we expect share price volatility may increase for a period of time,” referencing the company’s regulatory filing from Friday that registered a $200 million discounted share sale to private investors.
“For those shareholders who have come looking for a trade, I encourage you to exit.”
The deal, known as a private investment in public equity (PIPE) offering, raised funds by selling shares at a discount, and the Friday filing permitted those investors to trade their shares freely.
Concerns have been voiced by analysts regarding the rise of crypto treasury companies, as many firms’ crypto holdings begin to eclipse their market capitalizations.
KindlyMD stock plummets 55% following shareholder letter
Following Bailey’s suggestion to exit, KindlyMD (NAKA) shares closed Monday down 55.4% at $1.24.
There was a slight rebound after hours, with a 4.8% gain.
This marks the lowest share price for KindlyMD since early February, prior to its announcement of plans to acquire and hold Bitcoin (BTC) long-term and its recent merger with Bailey’s holding company, Nakamoto Holdings.
Bailey asserts PIPE deal will clear out non-aligned investors
In his letter, Bailey mentioned that while the influx of PIPE deal shares into the market will amplify volatility, he considers it a “critical opportunity for us to establish a base of aligned shareholders committed to our long-term vision.”
“This transition may signal uncertainty for investors, but we anticipate emerging from it with strong alignment and conviction among our supporters,” he added.
Related: Crypto treasury mNAVs collapse, only the strong will survive — Standard Chartered
On X, Bailey noted that KindlyMD shares experienced “intense volume,” designating it as a “day of transition” aimed at “upgrading our shareholder base from short-term traders to long-term investors.”
“Nearly 80 million shares have exchanged hands today,” he later added. “I’m once again grateful for the support and look forward to meeting our new shareholders!”
KindlyMD value dips below Bitcoin holdings
The decline in KindlyMD’s share price has reduced its multiple of net asset value (mNAV) to 0.7, with the company’s market value falling below that of its Bitcoin assets.
The firm possesses 5,765 BTC valued at over $665 million, while its market cap stands at $466 million, according to BitcoinTreasuries.NET data.
Bailey remained optimistic in his letter, affirming that KindlyMD’s goal is to become “the leading Bitcoin-native financial institution,” a vision that demands a “long-term strategy, creative thinking, and disciplined yet agile execution.”
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