Next Technology Holding, the largest Bitcoin treasury firm in China, announced that it would sell $500 million of common stock. The funds will be used to invest in more Bitcoin purchases and overall company activities of the AI-based software company. This strategic action places the company in a position to potentially increase its present digital assets by means of equity funding.
The Nasdaq-traded corporation has 5,833 Bitcoin on its balance sheet worth around 671.8 million dollars. This makes Next Technology the 15th largest corporate Bitcoin holder in the world, ahead of such well-known companies as GameStop.
In case the company invests half of the suggested offering in Bitcoin buying, it might gain 2,170 more coins. This strategic action would increase the total holdings of Next Technology to over 8,000 Bitcoin at the prevailing market prices.
Since launching its Bitcoin strategy in December 2023, the AI-based software company has shown impressive returns. Next Technology bought its first batch of 833 Bitcoins, and in March, it bought 5,000 more coins. The average cost of the Bitcoin that the company purchased is 31,386, which yields the company huge paper gains of 266.7%.
Next Technology has not set particular accumulation goals on its Bitcoin holdings, unlike its competitors Metaplanet and Semler Scientific. The company said that it would check market conditions on a monthly basis and then make other purchase decisions.
Next Technology is a part of an emerging trend of publicly traded companies moving towards Bitcoin treasury strategies via several funding options. These are equity offerings, convertible debt instruments, preferred stock sales, and specialized acquisition vehicles to purchase cryptocurrencies.
At present, there are 190 publicly traded companies that have Bitcoin on the corporate balance sheet, which is twice the number in the first half of the year. Their joint possession of Bitcoin has recently topped one million coins, which is more than 5% of the total supply of Bitcoin. MicroStrategy, the company of Michael Saylor, remains the leader in the corporate adoption of Bitcoin with almost 639,000 Bitcoin in its balance sheet.
The market response to the announcement of Next Technology was not very positive, as the stock dropped by 4.76% in the normal trading hours. After-hours trading was also weak, falling 7.43% as traders digested the implications of dilution. Moreover, the company has its main operations in the United States, Hong Kong, and Singapore, where it offers AI-based software solutions to its customers.
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