Leadership1 publisher2 min readPublished
A Goodwin memo puts crypto treasury companies on the shareholder activist target list
Three Goodwin Procter lawyers write that the premium these companies raised capital on has compressed into discounts across much of the sector. The discount itself is the profile shareholder activists have historically targeted.
The Board Room · Leadership desk
What happened
- Since the start of 2025 a growing number of public companies have repositioned legacy businesses around accumulating digital assets, some deploying them through staking, lending and protocol participation.
- Early digital asset treasury companies drew substantial institutional and retail capital because their shares traded at a significant premium to the market value of the coins they held.
- A substantial number of these companies now trade at or below the net asset value of their holdings, according to the Goodwin Procter memorandum.
- The memo lists the activist target profile: discounts after premium valuations, demands for return of capital, capital allocation and dilution questions, refinancing of complex structures, and developing disclosure.
- The authors set this against a record number of shareholder activist campaigns globally in recent years, with first-time activists increasingly targeting small-cap issuers.
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Why it matters
- constraint With shares below NAV, funding more coin purchases with new equity subtracts from per-share value, so restarting the accumulation engine takes something beyond the balance sheet.
- decision A board sitting at a discount has to choose between defending the accumulation mandate and returning capital to shareholders. The memo names that demand first among the ones discounts invite.
- precedent Once buyers price leverage, treasury management, governance and yield, a company whose only case is coins per share has to build a different argument before its next raise.
Below net asset value, a share sale subtracts. On an illustrative set of numbers, take a company holding $100 million of coins against 100 million shares, so NAV is $1.00 a share. Sell 10 million new shares at $1.50, buy coins with the proceeds, and holdings reach $115 million across 110 million shares, about $1.045 each. Sell the same 10 million shares at $0.70 and the company ends with $107 million across 110 million shares, about $0.973. The first raise adds roughly 4.5 percent to per-share NAV; the second takes about 2.7 percent out [15].
Wood, Roeser and Ubell described the flywheel as "the cycle in which a DAT or crypto-pivot company sells stock at a premium to NAV, uses the proceeds to buy more digital assets, grows per-share value, and thereby sustains or increases the premium that enables further stock sales" [6]. DATs typically acquire their holdings through capital-raising transactions, including private investment in public equity [14]. Premiums across much of the sector have compressed and in some cases become discounts [7].
The memorandum's fourth section is "Mitigating Shareholder Activism Risks". The authors say they suggest strategies for DAT issuers and their boards to prepare for and mitigate the risks of activist engagement and potential campaigns [13]. The published post breaks off before those strategies appear.
Two of the pressure points hold at any coin price. Some DATs use related-party or externally managed treasury arrangements, and some keep boards that activists may allege lack "an appropriate mix of public company, capital markets, risk oversight, and digital asset expertise" [11]. Both are governance questions a first-time activist at a small-cap issuer can press in a letter.
The memo also ties the discount to crypto prices. The authors expect investors to weigh access to capital, capital allocation decisions, leverage, treasury management, governance and the economics of the underlying digital assets, including yield from deploying them [8]. "Companies that demonstrate sustainable value creation may increasingly separate themselves from those with business models that depend primarily on continued access to premium-priced equity and debt capital," they wrote [9].
The memorandum describes "a substantial number" of these companies at or below NAV and does not say how many [16]. For a board, the sequencing is concrete inside one quarter. An issuance at a discount funds accumulation out of existing holders' per-share value [15], and the dilution complaint that creates is among the demands the memo says such discounts invite [10].
What to watch
- Whether a named activist takes a public position at a DAT, and whether the demand is capital return or board seats.
- What the mitigation section of the Goodwin memorandum actually recommends when the full text is published.
- Whether any subset of the sector regains a premium to NAV. At a premium, issuance is accretive again.