Divide the $225.07 million of consideration by the 51.62 million shares being issued and the implied price is $4.36 [1], which is also, precisely, the strike on the warrants [7], and which sits 53.5% above the $2.84 the stock printed once the market had read the filing [2][8]. The paper priced above where the market was willing to trade it within hours of disclosure.
Take the enlarged 56.61 million shares at $2.84 and the whole company is worth about $160.8 million [3], against 3,170 coins that the deal itself marks at $225.07 million [3] and that the roughly $80,000 spot level cited in the reporting marks at $253.6 million [4]. That is between 71 and 63 cents paid for a dollar of bitcoin [5], before anyone charges the $6.1 million stockholders' deficit [10] or the second 51.62 million shares the warrants could create [2].
Now run it from the other side. Ten non-US investors hand over coin worth $253.6 million at spot and take back stock worth $146.6 million at the post-announcement price, a gap of about $107 million [6], plus warrants they can only use if the shares rise more than half [7]. What the gap buys is 91.2% of a Nasdaq-listed company [7] whose bitcoin was booked about 11% under that spot mark [12]. Beneficial-ownership limits, Nasdaq requirements and any necessary shareholder approvals still apply [7], so 91.2% of the cap table is not automatically 91.2% of the votes.
The listing repair, meanwhile, is wildly over-specified: $225.07 million of contributed coin against a $6.1 million equity hole is about 37 times the fix on offer [8], and management expects exactly that effect on stockholders' equity and on the Nasdaq deficiency [13] flagged in April, when the company met none of the three alternative Capital Market standards [9]. Bitcoin, however, does not cover a payroll run [14]. There was $2 million of cash, a stated need for at least $2.5 million more to keep the growth plan going [12], no revenue in the quarter or the half and a $6.2 million six-month loss [11], call it $1.03 million a month against two months of cash, though a reported loss is not the same thing as cash burn [9]. Coin sold to fund operations shrinks the equity that cured the deficiency.
Three ways this can go. It works if the deal closes into a bitcoin recovery, the $71,000 entry looks shrewd, and the warrants get exercised and deliver $225.1 million of real cash [11]; William Alessi is on record that he passed on this strategy at the highs [18]. It goes nowhere if it never closes, since it is signed and not yet funded [4]. Or it closes and trades below its coin, which is what the 50 largest public holders losing 55% of their combined market capitalisation against bitcoin's 30% [10] has been saying for a year while other holders sell down or go back to their operating businesses [17]. This desk reads it as the third, and the falsification is cheap to watch for: a post-close print through $4.36.
