David Bailey, the current CEO of Nakamoto Holdings, has addressed rumors that began circulating after a Bitcoin treasury tracker implied that the company had sold a considerable amount of BTC.
The post from the Bitcoin treasury tracker, BTC Treasuries, was posted on November 20, and according to the page, Nakamoto had sold 367 BTC, which reduced its direct holdings from 5765 to 5398.
“Just to clarify, we didn’t ‘sell’ bitcoin. We invested the Bitcoin across several international treasury companies @Treasury_BTC @Metaplanet @future_hodlings, as a core part of our strategy is monetizing our bitcoin balance sheet. Our direct Bitcoin balance does not capture the value of these equity investments,” Bailey clarified on X.
David Bailey and Bitcoiners spar over semantics
Despite his attempt to explain the sale, or “investment,” as he prefers to call it, as swapping direct BTC for equity stakes in other Bitcoin treasury companies that are expected to continue holding the BTC on their own balance sheets, Bailey’s statement failed to convince many from their position that Nakamoto sold its Bitcoin.
In the comment section, there were many questions from users who genuinely wanted Bailey to clarify if the sale was in fact a sale or an investment, like he says. One user asked, “can you please clarify the difference between monetizing and selling? Are you saying that you sent the bitcoin to these other companies in lieu of cash? Because that seems like semantics. If I send some bitcoin to a boat owner, and I get the boat and he gets my bitcoin, you can call it investing, but I think that’s also called selling.”
In his response, Bailey compared the sale to selling Bitcoin and buying IBIT, claiming that it was also Bitcoin exposure, just in a different form. “We want to put a bitcoin equity in every capital market globally, the companies we seed keep the bitcoin so the equity still captures the value,” Bailey concluded.
Another user wanted to know more about the sale transaction, asking if Nakamoto would get back the BTC and what they would get in return for the investment. Bailey answered affirmatively, stating that the company gets equity that is valued on a Bitcoin per share basis.
“Eventually we’ll harvest those investments back into bitcoin on our balance sheet, but as long as the performance/execution is there, we are long-term investors,” he said.
Despite Bailey’s rationale, Bitcoiners are treating the transaction as a sale. With BTC showing weakness, it’s especially hard for Bailey to sell the “not a sale” angle, especially for $NAKA stockholders who have been suffering for months now.
David Bailey is winning
David Bailey’s publicly traded bitcoin (BTC) treasury company, Nakamoto, has not been doing so well since May. The once-high flyer complained about the “complexity of accounting” after it lost over $23 million on digital assets.
Despite the excuse, it also admitted that it had originally intended to pay a lavish, 10x multiple for a private business of Bailey’s, BTC Inc. That 10x multiple converts to $306 million based on BTC Inc.’s most recent annualized $30.6 million EBITDA disclosure based on its nine-month earnings.
Amid the carnage, Bailey has emerged as a winner because he founded BTC Inc., which is set to benefit from the all-stock windfall from Nakamoto. The company’s stock was once cheap, trading at $1.12 per share while NAKA shares were in the $30s, but now, the $1.12 peg for Bailey’s all-stock deal with BTC Inc. is above NAKA’s penny stock valuation.
This is because Bailey was somehow able to originally convince KindlyMD — the public company that provided the NAKA shares for Nakamoto to trade on the Nasdaq — to pay “an industry standard multiple, not to be less than 10, of the earnings before interest, taxes, depreciation, and amortization (EBITDA) of BTC and its subsidiaries.”
The all-stock deal with BTC Inc. will divide the $306 million figure by KindlyMD’s $1.12 per share PIPE price, so in the end, the value of the deal still falls to around $273 million, a reduction that is still currently higher than NAKA’s market cap, which has fallen to $234 million as of publication time.
Bailey benefits greatly in every scenario, but he has taken a step back as BTC Inc. CEO and passed the torch on to Brandon Greene. Of course, it’s not a total step back. Bailey has said he will remain the company’s chairman, citing his focus on Nakamoto as a reason for the move.
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