Capital B raises $8.8M from Adam Back for another BTC buy

[DKeller]

Saw this on CoinDesk today and thought the structure was pretty interesting.

Capital B just raised €7.6M ($8.8M) from Adam Back, with the shares priced at a 15.4% premium. The plan is to use the money to buy up to 376 more $BTC, which would take their holdings from 3,145 to 3,521 BTC putting them just behind Bitcoin Group SE among European public Bitcoin treasuries.

Capital B’s average buy price is already around €90,352 per BTC. So they’re underwater on the position right now... and still raising more money to buy more.

There’s another side to it too. Back’s stake goes up to 17.77%, and could eventually reach 27.8% if all the attached warrants are exercised. For everyone else, that potentially means quite a bit of dilution.

It feels like we’re seeing the BTC treasury playbook in its purest form: keep raising equity, keep adding Bitcoin, and basically bet that BTC appreciation will outrun the dilution over time.

Really curious how many of these smaller European treasury companies are actually underwater on their average BTC cost right now.

Also, when a deal comes with this many warrants, do you still see it as conviction buying? Or just dilution with a longer timeline? 😅

[Catenaccio]

Saw this on CoinDesk today and thought the structure was pretty interesting.

Capital B just raised €7.6M ($8.8M) from Adam Back, with the shares priced at a 15.4% premium. The plan is to use the money to buy up to 376 more $BTC, which would take their holdings from 3,145 to 3,521 BTC putting them just behind Bitcoin Group SE among European public Bitcoin treasuries.

Capital B’s average buy price is already around €90,352 per BTC. So they’re underwater on the position right now... and still raising more money to buy more.

I did not follow up Capital B investment but with this average price, they actually began some time in the last market cycle and bull run, so they stucked at high price even they try to DCA and lower down their average entry price.

Some sites that track Bitcoin treasuries from many entities, governments to public companies.
https://bitbo.io/treasuries/
https://coinmarketcap.com/charts/bitcoin-treasuries/
https://www.coinglass.com/BitcoinTreasuries

Details about Capital B
https://www.coinglass.com/BitcoinTreasuries/ALCPB

Capital B held bitcoin since 2024-11-05.

Also, when a deal comes with this many warrants, do you still see it as conviction buying? Or just dilution with a longer timeline? 😅

There is no warrant of profit even Bitcoin is very strong and can rise higher in price in coming years but profit or loss, it all depends on each individual investor and institutional investor like how they bought bitcoin and how they managed risk for their portfolios.

[348Judah]

If they had stopped earlier before now, then it is the best time for them to resume with their bitcoin investment because the future is always promising to be profitable.

They wouldn't want to continue missing out without investing when the sea order institution Meta Planets and Microstrategy investing steadily, because the future of finance today is Bitcoin against tomorrow.

[cryptoaddictchie]

Really curious how many of these smaller European treasury companies are actually underwater on their average BTC cost right now.

Also, when a deal comes with this many warrants, do you still see it as conviction buying? Or just dilution with a longer timeline? 😅

Some might in dip situation right now but they are a corporation treasury and obviously this isnt the tip of the iceberg on their portfolio and they dont lose the value only on paper assets.

Once bitcoin goes up then the so called loss becomes a thing of the past but I get that until it happened they are in the losing side. If bigger firms had a conviction like this whats more on retail with a lower buying power, it be like a fomo chain when they becomes suddenly a winner from a loser side.

[SeriouslyGiveaway]

Some might in dip situation right now but they are a corporation treasury and obviously this isnt the tip of the iceberg on their portfolio and they dont lose the value only on paper assets.

Once bitcoin goes up then the so called loss becomes a thing of the past but I get that until it happened they are in the losing side. If bigger firms had a conviction like this whats more on retail with a lower buying power, it be like a fomo chain when they becomes suddenly a winner from a loser side.

Corporations, institutions can have terrible capital and risk management and they can have severe losses, even financial collapses and bankruptcies. Like a classic bankruptcy of Enron in 2001, or in cryptocurrency industry there are FTX and Terra in two bear market cycles ago.

Bitcoin is here for everyone from individual investors to institutional investors but if any entity made bad risk management, leveraged too much, they have probability of ending with bankruptcy.

https://en.wikipedia.org/wiki/Enron_scandal
https://www.investopedia.com/terms/e/enron.asp
https://en.wikipedia.org/wiki/Bankruptcy_of_FTX
https://en.wikipedia.org/wiki/Terra_(blockchain)

[Faisal2202]

Of course, it is not conviction. They are already underwater, and when you are underwater, you merely show any conviction, but maybe they do have some love for BTC that they chose this. But it is the same playbook as MSTR. Maybe small in numbers, but the same one.

I would even say acts like this are not based on conviction but on the need, because they definitely did not have any choice to raise money, so they can delay the results which are inevitable. But maybe they can change them if they give BTC more time.

[cryptoaddictchie]

Corporations, institutions can have terrible capital and risk management and they can have severe losses, even financial collapses and bankruptcies. Like a classic bankruptcy of Enron in 2001, or in cryptocurrency industry there are FTX and Terra in two bear market cycles ago.

Bitcoin is here for everyone from individual investors to institutional investors but if any entity made bad risk management, leveraged too much, they have probability of ending with bankruptcy.

https://en.wikipedia.org/wiki/Enron_scandal
https://www.investopedia.com/terms/e/enron.asp
https://en.wikipedia.org/wiki/Bankruptcy_of_FTX
https://en.wikipedia.org/wiki/Terra_(blockchain)

Yes Im aware its risky but those corporation who invested on FTX and Terra which are both another cryptocurrency are known to have a malicious founder and team who did bad on their decision.

But the one mentioned in OP are investing on BTC comparing to crypto they bet on, Id say they are much safer compared to your given examples. But youre right, a very bad management of risk might turn them into poor company but Im pretty sure you know too that bitcoin is far from going to zero like those.

I cant forget terra since I am invested on their stablecoin with a high APY% and suddenly collapse like that.

[YOSHIE]

Capital B raises $8.8M from Adam Back for another BTC buy

It seems that the current Bitcoin price position has become the target of many companies to add their assets for long-term investment, It seems that the strategy of adding and expanding Bitcoin assets as a reserve asset has become the mainstay of many companies as big as what Adam Back is currently doing at Capital B.

This means that Capital B has made an additional increase in Bitcoin purchases of their company holdings, with the funds collected currently combining the Bitcoin they have reserved and the new ones, It is clear that Europe already has a company that owns the largest Bitcoin on the continent, it seems that Bitcoin in the future really has extraordinary hopes for those who store it.

[Free Market Capitalist]

Capital B is another company that tried to copy Saylor's model; some of these companies have already abandoned the model or have gone bankrupt and been liquidated. In the case of Capital B, this article warned of specific problems a few months ago.

The Parisian Playbook: Capital B Copying Saylor’s Blueprint, But Europe Isn’t America

Companies that have copied Saylor's model fall into two categories: either they are stagnant, or they are operating at a loss and at risk of bankruptcy. Companies with a real business that generates profits would never even consider switching to this model.

[kaankaya]

Saw this on CoinDesk today and thought the structure was pretty interesting.

Capital B just raised €7.6M ($8.8M) from Adam Back, with the shares priced at a 15.4% premium. The plan is to use the money to buy up to 376 more $BTC, which would take their holdings from 3,145 to 3,521 BTC putting them just behind Bitcoin Group SE among European public Bitcoin treasuries.

Capital B’s average buy price is already around €90,352 per BTC. So they’re underwater on the position right now... and still raising more money to buy more.

There’s another side to it too. Back’s stake goes up to 17.77%, and could eventually reach 27.8% if all the attached warrants are exercised. For everyone else, that potentially means quite a bit of dilution.

It feels like we’re seeing the BTC treasury playbook in its purest form: keep raising equity, keep adding Bitcoin, and basically bet that BTC appreciation will outrun the dilution over time.

Really curious how many of these smaller European treasury companies are actually underwater on their average BTC cost right now.

Also, when a deal comes with this many warrants, do you still see it as conviction buying? Or just dilution with a longer timeline? 😅

Buying more BTC while already underwater shows they really believe in the strategy, but the warrants make the story less simple. If Back can eventually get close to 28%, that’s a lot of potential dilution for everyone else.

Guess its not just about whether BTC goes higher. It’s whether the extra BTC they add can create more value than the dilution takes away. Still conviction, sure - just with a pretty expensive price tag 😅

[sunsilk]

Really curious how many of these smaller European treasury companies are actually underwater on their average BTC cost right now.

Maybe that's because they've bought during the bull run and when the price was foreseen to reach $100k and the cost that they have right now is still in negative and only awaits for the breakeven first.

Also, when a deal comes with this many warrants, do you still see it as conviction buying? Or just dilution with a longer timeline? 😅

If it's conviction then I guess that nothing beats MSTR for that. Despite that they've sold and didn't became vocal with it, we can't deny how they have bee convicted all of these years.

[PERtua]

It is important to understand that a loss underwater on the original btc investment. Does not necessarily indicate that the next investment will be a mistake. The real question is whether or not Capital B can continue to rake in the money without drowning shareholders. The dilution can be less impactful if new shares are being issued at a premium to the underlying value of the company's btc. However as the market fails to continue to price them at that premium. It will become much more difficult to sustain such a strategy. To me that's the financing aspect more important than the price of BTC right now.

[Zlantann]

Of course, it is not conviction. They are already underwater, and when you are underwater, you merely show any conviction, but maybe they do have some love for BTC that they chose this. But it is the same playbook as MSTR. Maybe small in numbers, but the same one.

I would even say acts like this are not based on conviction but on the need, because they definitely did not have any choice to raise money, so they can delay the results which are inevitable. But maybe they can change them if they give BTC more time.

Copying Strategy's investment model could have its consequences. Europe has stricter regulatory laws than the US, so Capital B would have to be careful. I also don't see a model that depends on continues rise in Bitcoin prices to stay afloat as perfect. Bitcoin is volatile and these organisations might be forced to sell even when the price is down to cover financial obligations such as dividends. 

It's good to see businesses invest in Bitcoin, but it should be done in line with sound financial practices. Poor management of Bitcoin assets could affect the company, which would cause backlash against the crypto industry.

[hugeblack]

The biggest winners are the shareholders, who theoretically receive shares at a good premium, and since Bitcoin is expected to rise, this model shouldn't pose a problem. The average purchase price of €90,352 per BTC isn't bad in the long run, but it illustrates how their buying decisions aren't wise for those who follow them to buy.

[Botnake]

You can say buying more Bitcoin sounds bullish at first look but if we look at the bigger picture, we should also look at how much BTC each individual share represents after issuing new shares. So this is the issue, my friend. If they issue too many shares just to raise money, which is what they are doing, the impact is that existing shareholders can get diluted.

On the other hand, if they can issue only a small number of new shares and still raise enough money to buy more Bitcoin, then that can be good because it may increase the BTC per share. So we should not only look at how much Bitcoin the company has bought. We should also look at how much dilution happened in the process.

its' really a problem if we assume that big companies buying bitcoin would signal bullish already, even if we know its not them buying they are using shareholders money to buy bitcoin at the end of the day the risk is not on them but on the shareholders.

[KayaHodler]

Very similar to MicroStrategy plan just on a smaller scale. Put in more money, buy more BTC and hope that BTC price rise more than value lowering impact you. When the buying rights are able to send one individual share from 17% to almost 28% it can not simply be busy with "conviction only. It seems like the insiders of all are requesting for more control and not more BTC ownership.

However, it is certainly a bold one in the face of those losing money based on the average price and it does indicate a longterm vs. shortterm plan. However this value-lowering will put a heavy stress on the small investors if the BTCs dont go up or are in a holding pattern for a while, company will be okay because they are simply printing more of it. This whole group on the same bet lol, truly risky bet.

[fillippone]

I am not sure about this, but I strongly suspect Adam Back bought those shares with an in-kind contribution to the Capital B. He added BTC to their treasury, and had shares in return.
Yes, BTC is better than shares of a DAT, but I think you can have a Lombard against those shares in many jurisdictions, something that is not always true with BTC, paradoxically.

[Faisal2202]

Copying Strategy's investment model could have its consequences. Europe has stricter regulatory laws than the US, so Capital B would have to be careful. I also don't see a model that depends on continues rise in Bitcoin prices to stay afloat as perfect. Bitcoin is volatile and these organisations might be forced to sell even when the price is down to cover financial obligations such as dividends. 

It's good to see businesses invest in Bitcoin, but it should be done in line with sound financial practices. Poor management of Bitcoin assets could affect the company, which would cause backlash against the crypto industry.

You are right, EU pressure, especially the leverage that the US could give to MSTR. EU entities can't, they are much smaller, they might not have that kind of cushion, and this point has reminded me of their previous developments, like a few months back maybe when they made a huge claim, but that was just talks with the board. Maybe the talk was for raising funds that were just too much! I can't recall it correctly now. But it was something like this.

Poor management of BTC can affect anyone, and when companies like this get affected, it might not have a big backlash on the crypto industry because they are small, but I would be more worried about MSTR, not about Capital B.

[Cryptomultiplier]

I like one fact that a company like capital B or microstrategy holds and acquires Bitcoin on their balance sheet as a Treasury company from OTC desks instead of by ETF which provides distinct advantages for them both as it concerns control of the asset, escaping jurisdictional regulations and policies and avoiding fees.

This is how capital B as a Treasury company is building their own corporate strategy even though they have little as compared to Microstrategy with a bigger portfolio.
Specialized institutional funds, Adam Back, TOBAM, UTXO management, all at one point are the major contributors with high allocation to ensure this company can acquire this much even if not as much as MSTR.

[Don Pedro Dinero]

I am not sure about this, but I strongly suspect Adam Back bought those shares with an in-kind contribution to the Capital B. He added BTC to their treasury, and had shares in return.

Yes, he had already become a shareholder last year, but now he has injected new capital in exchange for shares, paying a premium but also securing a potential future benefit.

French Bitcoin (CRYPTO: $BTC) treasury firm Capital B ($ALCPB) has raised €7.6 million (worth around $8.8 million) from Blockstream CEO Adam Back as it looks to add more Bitcoin to its corporate reserves.

The company said that Back subscribed to 13.18 million shares at €0.58 each, a 15.4% premium to Capital B's September 1 closing price. Each share comes with four warrants, giving Back additional exposure to the company if its share price rises.

Two of the warrants can be exercised at €0.75 per share, while the other two carry exercise prices of €0.98 and €1.27. All four expire in five years.

Capital B Raises €7.6M from Adam Back to Expand Bitcoin Treasury

Yes, BTC is better than shares of a DAT, but I think you can have a Lombard against those shares in many jurisdictions, something that is not always true with BTC, paradoxically.

I don't think that was Back's main motivation for making this investment, but we can only speculate on that.