Fold Secures $250 Million in New Share Sale to Increase Bitcoin Holdings
Fold (Fold) has entered into an agreement to issue and sell $250 million of common stock to pre-selected institutional investors, as part of its strategy to expand its Bitcoin corporate treasury, the company announced Tuesday.
Fold, a publicly traded firm providing financial services focused on Bitcoin, declined to specify a timeline for the issuance.
The sale proceeds, if any, will primarily fund the purchase of Bitcoin, bringing the company’s holdings closer to a Bitcoin-backed valuation of $1 billion.
Corporate Strategy in Context
Fold holds approximately 1,488 BTC (~$155 million) as of the announcement. It joins a growing trend of companies publicly acquiring Bitcoin, following strategies similar to Michael Saylor’s approach at MicroStrategy. As of recent data (July 18, 2024), MicroStrategy reported holding 592,100 BTC ($64.2 billion).
CoinGecko data indicates Bitcoin has fallen nearly 4% in the past 24 hours and about 5% over the last seven days. A Standard Chartered report highlights potential risk, noting that roughly half of non-crypto public company Bitcoin treasuries would be “underwater” (costing companies more to acquire than current market value) if prices fell below $90,000.
Fold’s stock performance has underperformed significantly this year, dropping $5.07, or ~60% since January 1st. At the data point, shares traded at $4.57, down nearly 3%.
Growing Adoption and Risk
Fold is one of 236 entities holding Bitcoin (~13% increase in the past month according to Bitcointreasuries.net). A significant portion (131 firms) are public companies—a number that continues to grow.
While examples of corporate Bitcoin accumulation are increasing, analysts caution about the financial exposure compared to the significant price volatility characteristic of digital assets. Bitcoin recently traded near $104,500.
