Vanadi Coffee Allocates Capital to Bitcoin Strategy Despite Financial Troubles
Spanish coffee chain Vanadi Coffee, operating from just six locations, has approved a strategic investment of up to $1.17 billion into Bitcoin, despite posting substantial losses last year. This move positions the company, struggling with financial deficits, as one of the latest firms seeking salvation through crypto assets.
In Brief
- Shareholders approved the company’s Bitcoin strategy despite negative equity.
- The board is authorized to raise $1.17 billion via convertible debt for BTC purchases.
- Directors could receive substantial bonuses if market cap meets certain metrics.
According to an announcement late last week, shareholders unanimously supported the company’s decision to accumulate up to $1.17 billion (€1 billion) in Bitcoin. This action follows previous holdings: Vanadi Coffee reportedly acquired 20 additional Bitcoin coins at an average price exceeding $107,000 each, adding significantly to its existing 34 BTC stake, which was settled by the end of June.
Financial Position
In June, data from a Spanish multilateral trading facility revealed Vanadi Coffee’s persistent cash crunch. Despite revenue growth, the company registered deepening annual losses and maintained a negative operating cash flow.
Its approach to adopting Bitcoin requires raising capital through convertible debt and designating it as a “primary reserve asset” to restructure its treasury strategy, potentially aiming for recovery rather than scaling conventional business operations.
Critical Views
Experts remain skeptical about the strategy’s viability, cautioning that Vanadi’s core business challenges are unlikely to disappear simply by investing in a volatile asset class.
“Most new ‘bitcoin treasury companies’ are gimmicks, and will likely fail,” noted Andrew Bailey, a senior fellow at the Bitcoin Policy Institute. “Whether by luck or a momentous hit call, a badly run business doesn’t become a good one just because it is acquiring sound money.”
Vanadi’s board has received authorization to raise capital via convertible debt—a tactic reminiscent of Michael Saylor’s bold decision at MicroStrategy—but without a clear revenue stream. Furthermore, capital rights holders may face dilution through exempt preemptive subscription rights for new shares.
“Bitcoin has long appeared strange and risky to MBA types who benefit from extant financial systems,” Bailey commented. “Their minds will remain closed to bitcoin, I suspect, for a good while longer, and the existence of small bitcoin treasury companies is unlikely to change much.”
‘Gimmick’ Tier Allocation
The company’s path mirrors more modest moves by other firms under extreme financial pressure, such as Australian biotech company Opyl, which utilized Bitcoin after almost exhausting available funds.
Distinguished from institutional-scale holders targeting fixed-income products (like MicroStrategy), Vanadi represents what Bailey describes as the “gimmick” tier.
“Strategy, though flashy, is different in kind from these smaller shops… though, and is stalking bigger prey: the trillions invested in highly liquid fixed income products,” Bailey explained.
While Vanadi’s small initial holdings and simple expansion may theoretically offer potential for rapid gains, the fundamental operational issues demand resolution.
Vanadi Coffee has yet to comment further on Decrypt’s latest inquiries regarding this strategic shift.
