Corporate jargon can only do so much to mask financial distress. Nakamoto Inc. (Nasdaq: NAKA), a prominent Bitcoin operating company and the parent firm behind Bitcoin Magazine and the global Bitcoin Conference series, announced a major balance sheet restructuring.
The corporate press release dressed up the move as “strengthening the capital structure.” However, the reality is simpler: the company had to sell BTC to appease its lenders.
The company’s total treasury sits at 4,467 BTC following the most recent sale.
The fire sale
Nakamoto disclosed that it liquidated approximately 600 Bitcoin and related derivative positions. The company has netted $48 million in proceeds as a result of the sale. Shortly after the sale, $45 million of that cash was used to pay down a crypto exchange, Kraken.
However, Nakamoto’s balance sheet remains heavily leveraged, with a remaining debt of 165 million USDT owed to Kraken. The firm managed to extend 105 million USDT of that principal to June 2027 and secure an interest rate reduction to 7.75%.
The company also announced a $25 million share repurchase program and celebrated regaining compliance with Nasdaq’s minimum $1 bid price rule. However, the announcement carefully glossed over the fact that it required a drastic 1-for-40 reverse stock split just to stay listed.
Market warnings
Nakamoto built its reputation as a standard-bearer for institutional Bitcoin adoption. However, the debt-fueled strategy has subjected the firm to the unforgiving whims of market cycles.
Market observer Justin Bechler pointed out that Nakamoto bought Bitcoin near the top at $118,000, panic-sold during a March downturn at $70,000, and has now dumped 600 more at $61,000.
Be the first to comment