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PHOENIX - Fold Holdings, Inc. (NASDAQ:FLD), currently valued at $218 million in market capitalization, announced Tuesday it has secured a $250 million equity purchase facility, with proceeds primarily intended to acquire additional bitcoin for its corporate treasury. According to InvestingPro data, the company maintains strong liquidity with a current ratio of 2.2, indicating sufficient resources to meet near-term obligations.
The bitcoin financial services company will have the right, but not the obligation, to issue and sell up to $250 million in newly issued common stock, according to a press release statement. The company maintains control over the timing and amount of any drawdowns from the facility, subject to certain restrictions.
Before Fold can access the facility, a registration statement covering the resale of the common stock must be filed and declared effective by the Securities and Exchange Commission. The company plans to file this registration statement, as the offers and sales will be made in a private placement under exemptions from SEC registration requirements.
Cohen & Company Capital Markets, a division of J.V.B. Financial Group, LLC, served as the exclusive placement agent for establishing the facility.
Fold Holdings describes itself as the first publicly traded bitcoin financial services company, providing products that allow individuals and businesses to earn, save, and use bitcoin. The company currently holds over 1,490 BTC in its treasury. InvestingPro analysis reveals the stock has experienced significant volatility, with the price dropping 57% over the past six months. Subscribers can access 8 additional key insights about FLD’s performance and financial health through InvestingPro’s comprehensive analysis tools.
The equity purchase agreement represents a potential expansion of Fold’s bitcoin holdings, though the company is not required to utilize the facility and maintains discretion over its use.
This announcement comes as part of Fold’s strategy to integrate bitcoin into everyday financial experiences through products including the Fold App, Fold Credit Card, Fold Bitcoin Gift Card, and Fold Card. While the company shows high shareholder yield, InvestingPro data indicates challenging fundamentals with negative EBITDA of -$13.6 million in the last twelve months.
In other recent news, Fold Holdings has been the focus of several significant developments. Northland Securities initiated coverage of the company, assigning it an Outperform rating and setting a price target of $10.00. This reflects Northland’s confidence in Fold Holdings’ potential for growth, particularly due to its innovative integration of Bitcoin into consumer financial products. Fold Holdings offers a platform for buying, selling, earning, saving, and spending Bitcoin, including a rewards program that allows users to earn BTC rewards. In a strategic move, the company announced the appointment of Matthew McManus as its new Chief Operating Officer. McManus brings extensive experience from his previous roles at companies like Twitter and Capital One, and his expertise is expected to enhance Fold’s operational performance. CEO Will Reeves expressed optimism about McManus’s alignment with the company’s strategic vision. Fold Holdings continues to expand its market presence and solidify its position in the cryptocurrency landscape.
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