Has the PIPE mannequin failed for bitcoin treasury firms? The collapse within the share costs for 2 notable lately closed offers — KindlyMD (NAKA) and Attempt (ASST) suggests as a lot.
A PIPE, or Personal Funding in Public Fairness, is a financing mechanism the place institutional buyers buy shares straight from a publicly traded firm at a pre-determined worth, usually under market worth, which permits the corporate to lift capital at a a lot sooner price with out the prolonged and expensive means of a standard public providing.
PIPE transactions are sometimes utilized by firms present process reverse mergers or going public by way of special-purpose acquisition firm (SPAC), and so they have lately grow to be a most well-liked funding technique amongst bitcoin treasury firms seeking to quickly increase their bitcoin holdings.
Regardless of their finest efforts, current examples recommend that the PIPE mannequin isn’t just struggling to ship shareholder worth but additionally incinerating investor capital at a speedy price.
This function is a part of CoinDesk’s Bitcoin Treasuries Theme Week, sponsored by Genius Group.
A case examine for PIPE
The corporate to embrace a PIPE was healthcare firm KindlyMD (NAKA), which accomplished a reverse merger in Could 2025, leading to bitcoin treasury firm Nakomoto turning into a completely owned subsidiary and well-known bitcoin advocate David Bailey turning into the CEO. Pivotal to this transaction was a PIPE financing deal that raised $563 million in gross proceeds to largely fund bitcoin purchases.
Moreover, the corporate issued a $200 million senior secured convertible be aware to Yorkville Advisors, which was later closed and changed with one other be aware. This took the whole financing for NAKA to $763 million.
The phrases of the PIPE have been as follows: the preliminary spherical raised $510 million at $1.12 per share in Could, adopted by a further $51.5 million at $5 per share in June.
These funds have been deployed to build up bitcoin, with NAKA buying 21 BTC for $2.3 million in July and an additional 5,743 BTC for $679 million in August.
Regardless of the speedy accumulation of bitcoin, the corporate’s market efficiency hasn’t adopted swimsuit.
For the reason that reverse merger again in Could, NAKA’s inventory has fallen by greater than 95% from highs of $30 to the present $0.80. Its market internet asset worth (mNAV) has additionally slipped under 1, indicating that the market now values the corporate at lower than the price of its underlying bitcoin and property.
The second firm to undertake a PIPE technique was Attempt (ASST), based by Vivek Ramaswamy, which merged with Asset Entities via a SPAC deal introduced in Could and accomplished in September.
Attempt raised $750 million in gross proceeds via a PIPE priced at $1.35 per share, representing a 121% premium to ASST’s pre-merger share worth.
The proceeds funded the acquisition of 5,885 BTC, and the construction was totally debt-free. Along with the PIPE, Attempt introduced a $450 million fairness shelf providing and a $500 million share buyback plan supposed to counteract dilution.
The corporate additionally inked an all-stock deal to accumulate one other bitcoin treasury firm buying and selling at a reduction to the worth of its stack — Semler Scientific and its 5,048 bitcoin.
If authorized, the pending acquisition of Semler Scientific would improve Attempt’s bitcoin holdings to 11,700 BTC. Regardless of these strikes, ASST’s inventory efficiency has mirrored that of NAKA, plummeting greater than 90% from its all-time excessive in Could, as excessive as $12, now buying and selling round $1 per share. Just like NAKA, ASST’s mNAV is just under 1.
Warning is the phrase going ahead
The desultory efficiency of NAKA and ASST calls into query no less than two different bitcoin treasury SPAC/PIPE offers but to be accomplished.
One in all them is the merger between Twenty One Capital (XXI) — led by Jack Mallers — and Cantor Fairness Companions (CEP). The agency introduced its PIPE transaction again in April, turning into the third-largest bitcoin treasury agency with holdings of 43,514 BTC. Just like the earlier PIPE-driven offers, preliminary post-merger enthusiasm despatched CEP’s share worth larger from $10 to $60, however shares have now retreated to round $20.
As well as, Bitcoin Normal Treasury Firm (BSTR), led by Adam Again, plans to go public via a SPAC merger with one other Cantor car (CEPO) and goals to lift a complete of $3.5 billion, with as much as $1.5 billion by way of a PIPE, anticipated to launch in This fall.
CEPO shares peaked at $16 within the preliminary pleasure after the announcement and have since retreated to the $10.50 space.
In a nutshell, what these offers present is that whereas PIPEs are a strategy to fast-track financing for bitcoin treasury companies, they’re additionally a doubtlessly dangerous investments that warrant warning.
