Fold Holdings, Inc. (NASDAQ:FLD) stock initially soared as much as 21%, before paring gains to 4%, after the bitcoin financial services company announced it has secured a $250 million equity purchase facility, with proceeds primarily intended to expand its bitcoin treasury holdings.
The company, which describes itself as the first publicly traded bitcoin financial services firm, will have the right but not the obligation to issue and sell up to $250 million in newly issued common stock. Fold will control the timing and amount of any drawdown on the facility, subject to certain restrictions.
Before the facility can be utilized, a registration statement covering the resale of the common stock must be filed with and declared effective by the Securities and Exchange Commission (SEC). The company plans to file this registration statement, as the offers and sales of common stock under the facility will be made in a private placement relying on 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.
The significant stock price jump reflects investor enthusiasm for Fold’s strategy to increase its bitcoin holdings. This move comes amid growing interest from public companies in holding bitcoin as a treasury asset, particularly as the cryptocurrency has seen substantial price appreciation in recent months.
