Capital B's Treasury Holdings Rise While Share Value Remains Flat
A company that invests in Bitcoin can have two main ways to raise funds for buying more coins. One is through cash earned by its operations, which doesn't directly add shares or debt. The other is by selling new shares, borrowing money, or issuing packages combining ordinary shares and warrants.
France's Capital B is a Bitcoin treasury company that operates in the Euronext Growth Paris market. Between August 17 and September 7, its treasury Bitcoin holdings increased from 3,145 BTC ($77,282) to 3,521 BTC, roughly a 12% rise. However, the value of each share barely moved under the company's calculation, which includes some shares that could be created in the future.
The method of paying for Bitcoin is crucial when assessing a treasury stock. Selling new shares raises cash but existing shareholders own a smaller percentage of the company. Borrowing preserves their percentage for now but adds a repayment obligation. Capital B has used convertible debt, described as 'Bitcoin-denominated financing', which gives lenders a contractual path into shares.