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Stocks in the healthcare-to-Bitcoin firm KindlyMD Inc. were cut in half on Monday as its CEO cautioned about an imminent rise in “stock price fluctuations” and advised short-term investors to divest if they are merely seeking to gain.
“We anticipate that stock price fluctuations may escalate for a certain duration,” David Bailey stated in a letter to shareholders on Monday, referencing the company’s regulatory filing on Friday, which announced a $200 million discounted share offering to private investors.
“For shareholders who are looking for a quick profit, I urge you to leave.”
KindlyMD’s transaction, termed a private investment in public equity (PIPE) offering, generated funds by providing its shares at a reduced rate and its filing on Friday permitted those investors to trade their shares without restriction.
Analysts have expressed concerns regarding the rise of so-called crypto treasury firms, as the valuation of the crypto assets held by several companies is beginning to exceed their market valuations.
KindlyMD stock slides 55% following shareholder letter
Investors seemingly heeded Bailey’s suggestion to divest, as shares in KindlyMD (NAKA) concluded trading on Monday with a 55.4% loss at $1.24.
The stock experienced only a minor increase after hours, rising by 4.8%.
This marks the lowest share price for KindlyMD since early February, well before it revealed intentions to acquire and retain Bitcoin (BTC) in the long term and merged with Bailey’s investment firm, Nakamoto Holdings, the previous month.
Bailey claims PIPE deal will eliminate non-aligned investors
Bailey mentioned in his letter that while the shares entering the market from the PIPE deal will amplify volatility, he views it “as an essential opportunity for us to cultivate our base of dedicated shareholders who are invested in our long-term vision.”
“This transition might signify a time of uncertainty for investors, and we are eager to emerge on the other side with unity and conviction among our supporters,” he continued.
Related: Crypto treasury mNAVs plummet, only the resilient will endure — Standard Chartered
Bailey remarked on X that KindlyMD shares had experienced “high trading volume,” but characterized it as a “day of transition” where the company was “upgrading our shareholder base from short-term traders to long-term investors.”
“Nearly 80m [million] shares have changed hands today,” he subsequently added. “Once again I’m grateful for the support and look forward to connecting with all our new shareholders!”
KindlyMD valuation dips below Bitcoin assets
KindlyMD’s decline in share price has led its multiple of net asset value (mNAV) to decrease to 0.7 as the company’s market valuation has fallen below that of its Bitcoin assets.
The firm possesses 5,765 BTC with a total worth exceeding $665 million, while its market capitalization stands at $466 million, according to BitcoinTreasuries.NET data.
However, Bailey remained undaunted in his letter, asserting that KindlyMD’s objective is to establish “the preeminent Bitcoin-native financial organization,” a goal he added requires “a long-term approach, innovative thinking, and disciplined yet agile execution.”
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