This post is a short and simplified analysis of ten companies that lately approved to purchase, adopt, allocate or retain cryptocurrency payments as treasury asset.
10 companies Bitcoin investment plan
| Company | Plan in USD millions |
|---|---|
| Rumble INC. | x |
| enlivex therapeutic Ltd | $1 |
| hoth therapeutics | $1 |
| acurx pharmaceuticals inc | $1 |
| LQR House inc | $11 |
| cosmos Health inc | x |
| Genius group Ltd | $120 |
| thumzup Media Corp | $1 |
| solidium technology | 60% of excess cash |
| interactive strength inc | 25% average daily cash holding |
The 10 companies:
- accumulated deficits in the past,
- registered losses in 2023,
- did not generate positive cash inflows from operations in 2023,
But that does not explain their financial situations, for some of them it’s business as usual and as planed, when for others there is relatively significant doubt about their ability to continue operations.
The reasons that push companies to choose Bitcoin as a treasury asset are not the same, both successful and failing business are opting for Bitcoin.
The reasons include:
- adding Bitcoin to a balance sheet can increase stock price,
- Bitcoin inflation-resistant characteristics may make it a reliable asset as a functional store of value,
- excess treasury for 12 to 18 months,
- flexibility for customers to purchase using cryptocurrencies,
- modern hedge against inflation,
- safe haven in times of economic uncertainty,
- battle against market manipulators (naked short selling) dropping share price,
- successful fund raising,
- yield improvement,
Bitcoin can be a tool to solve the problems listed above!!
1- Rumble INC.
According to an article published by BLOCKONOMI on November 20, Rumble is considering Bitcoin as a treasury asset. Rumble is a video sharing platform that generate revenue from advertising fees.
Rumble apparently does not have a treasury problem, the company has excess cash to maintain it’s operation. The real problem Rumble inc is facing is it’s cost of services that include :
- programming,
- content costs,
- data center,
for 2023, cost of services alone is $M146 when revenue is $M80 only. This lead to losses from operations that accumulated as deficits over time.
The rumble stock is not generating value for shareholders to the point that even the company directors are selling their holding and the stock price is declining from a $14 in 2022 to $5 in November 2024.
According to the same BLOCKONOMI article, Rumble stock surged 9% following announcement. Adding Bitcoin to a balance sheet can simply increase stock price.
2- ENLIVEX therapeutic Ltd
On November 20, 2024 ENLIVEX announced that the company’s board of directors approved the purchase of up to $1M of Bitcoin as part of its cash management strategy. According to the press release the company believe that Bitcoin:
- will serve as a strong and diversifying treasury reserve asset,
- can provide the company with a potential functional store of value,
- can provide an inflation hedge to standard currencies.
ENLIVEX is a clinical stage bio-pharmaceutical company with recently no saleable products and have not generated any revenue from product sale, but due to relatively significant funding, the company cash and cash equivalent seem sufficient with excess allocated to banks short term deposits.
3- HOTH therapeutics INC
HOTH therapeutics inc is a clinical stage bio-pharmaceutical company, clinical stage means that the company product is under development and that they did not start selling it. It’s a common situation in the bio-pharmaceutical business.
Naturally the company registered $M52.9 accumulated deficits over time but is relatively well funded and has sufficient cash to maintain it’s operation.
Hoth therapeutics is not purchasing Bitcoin to solve a problem. The company believe that Bitcoin inflation-resistant characteristics may make it a reliable asset as a functional store of value.
4- ACURX pharmaceuticals inc
Acurx is a late stage bio-pharmaceutical company that have never generated revenue from product sales, has accumulated deficit to -$64M, but still have $5.7M in cash as of September 30, 2024.
According to a press release published on November 20, 2024 the company believe that Bitcoin limited supply and inflation-resistant characteristics provide a functional store of value and will serve as a strong treasury reserve asset for cash not needed over the next 12 to 18 months.
5-LQR House inc
On November 19, 2024 LQR House inc published a press release announcing that the company board of directors has approved the purchase of up to $1 million in Bitcoin as part of its treasury management strategy.
According to the same press release LQR House inc will began accepting payments in cryptocurrencies and will retain up to $10M of payments in Bitcoin.
LQR House inc wants to give customers the flexibility to purchase alcohol using cryptocurrencies and consider Bitcoin as a hedge against inflation.
LQR House inc is a niche e-commerce platform specializing in the spirits and beverage industry, due to it’s 2023 IPO and additional public offerings, the company some excess cash allocated to mutual funds.
The 2024 statements of operations for nine months ended September 30, show some positive sign like increase in product revenue and a decrease in general and administrative expenses.
6- cosmos Health inc
On November 18, 2024 Cosmos Health inc announced that it has adopted a strategy to include Bitcoin as part of its treasury reserve assets.
According to the news release the company took this decision for the following reasons:
- investing in new technologies,
- diversify its balance sheet,
- accommodate customers who wish to make payments in cryptocurrencies.
Cosmos Health inc is active in branded pharmaceuticals, generics and nutraceutical product markets. Even though the company working capital is decreasing due to the use of cash in operations and the application of its investment program, Cosmos health still have some excess cash to maintain it’s operations.
7- Genius group Ltd
On November 12, 2024 Genius group Ltd published a press release announcing that its board has adopted a global ‘’Bitcoin-first’’ strategy with Bitcoin to be the primary treasury reserve asset,
Genius initial target is to acquire $120M in Bitcoin, to be held for the long term as its primary treasury reserve asset.
The case of genius group is special because the company stock price went from $96.8 in June 2022 to $0.9 in November 22. and that’s why they are buying bitcoin, as of November 25, the company hold 153BTC according to bitcointreasuries.net
8- Thumzup Media Corp
On November 15, 2024 Thumzup Media Corporation published a news release announcing that the company’s board of directors approved the purchase of up to $1M in Bitcoin. The company believe that Bitcoin infinite supply and inflation-resistant qualities enhance its role as a reliable asset for preserving value.
Thumzup has a small revenue of us$2,048 in 2023 compared to its total operating expenses of us$2.5 million. Operating activities are not generating cash but using cash and as of September 30, 2024 the company has us$110,246 cash only.
Thumzup operates in the social media marketing segment and offering a SaaS that incentivizes real people to become content creators and post authentic valuable posts on social media about the advertiser and its products.
The company has generated minimal revenue for 2 years, which is enough time to judge the business reliability. SaaS business has significant flexibility and thumzup can still add or change features in its app.
The company now wants to purchase Bitcoin when the company core operations are not generating cash but using cash. This could be the right moove for Thumzup even if it’s a little bit late. In fact there is an opportunity for a change in strategy for SaaS companies to Bitcoin holding companies like Microstrategy did.
9- solidion technology
On November 14, 2024 solidion technology inc published a news release on prnewswire.com announcing a strategic bitcoin allocation for corporate treasury.
According to the news release, solidion will :
- commit 60 % of any excess cash from operations to Bitcoin purchases,
- convert interest earnings on cash held in money market accounts to Bitcoin,
- designate a percentage of future funds raised to acquire additional bitcoin and hold them for the long term.
According to the company the 10-Q Form for the quarterly period ended June 30, 2024 Solidion technology, Inc is an early stage company focused on the development and commercialization of batteries, with no sales and it accumulated net losses since inception, and as of June 30, 2024, solidion had cash and cash equivalents of $256,504.
The same 10-Q form recognize that the company is projecting insufficient liquidity to sustain its operations.
Solidion is an engineering company and only a technical expert can give an opinion about their products, but as a company in development and research stage it’s clear that they will continue to use cash until they get their product ready for sale.
It’s not clear but the company strategic bitcoin allocation for corporate strategy is probably used as an argument to support its future funds raising operations that will provide cash for development and research.
10- interactive strength inc
On November 21, 2024 Interactive strength inc published a news release announcing that the board of directors has approved a maximum cumulative bitcoin purchase of up to $5 million and that the company plans to accept payment in digital currencies.
Interactive strength inc is an innovative specialty fitness equipment located in Austin, Texas. The company has a negative cash flows due to it’s insufficient revenue and accumulated a significant deficit due to a history of losses.
Interactive has a serious revenue problem, its revenue is relatively very low compared to its total operating expenses. As of September 30, 2024 the company financial statements are showing positive signs of improvement, Probably that's what explain their decision to purchase Bitcoin.
Microstrategy’s Bitcoin Strategy playbook is controversial, Traditional finance does not seem to apply here, normally investing in one asset is the perfect recipe for catastrophe. But for now the numbers are good everything is up and someone who dare criticizing the playbook can turn idiot.
The key maybe to understanding the playbook is in two words : FINITE SUPPLY. On November 21, 2024 Reuters published an article announcing that china has found $83 billion worth of gold reserves in Hunan, and the idea of mining operations in other planets or asteroids is ridiculous now but possible in the future. This legitimize the idea that all metals are theoretically!! in infinite supply and cheap.
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