Golden Finance reports that Matthew Sigel, a digital asset researcher at VanEck, has issued a warning that the share price of at least one publicly traded company ($SMLR) holding Bitcoin inventories in the current market has approached parity trading at net asset value.
Sigel pointed out that in such circumstances, if the company continues to raise funds through market issuance to purchase Bitcoin, it will not only fail to create value for shareholders but also lead to the dilution of shareholders’ equity. He emphasized that this situation is worthy of vigilance as it may trigger a series of consequences detrimental to the company’s long-term development.
In response to this, Sigel has put forward a series of protective mechanism suggestions for the relevant companies. He believes that when the company’s stock price is lower than its net asset value, the issuance of stocks should be resolutely suspended to avoid further lowering the company’s value. Meanwhile, stock repurchase can be given priority to stabilize stock prices and enhance market confidence. Furthermore, it is also crucial to adjust the compensation structure of senior executives to make it more closely bound to the long-term interests of the company and avoid situations where the interests of the company and shareholders are harmed due to senior executives’ pursuit of short-term benefits.
Sigel also particularly called on the company’s board of directors to take timely action and deal with this situation at the strategic level. He mentioned that he hopes these companies can learn from the lessons of past mining enterprises and avoid repeating the mistakes of excessive stock issuance leading to deterioration of the company’s financial situation and excessive executive compensation failing to bring corresponding performance growth to the company. This warning undoubtedly serves as a wake-up call for listed companies holding Bitcoin. The subsequent decisions of related companies and market reactions are worth continuous attention.
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