Matador Ties Share Sales to Regular Bitcoin Buys
Matador Technologies has made an important change to its $100 million convertible-note facility. The company can now use 10% of the net proceeds from each share sale under the deal to buy Bitcoin within five business days after the end of the month.
The tweak ties Matador's Bitcoin plan directly to its fundraising efforts, allowing it to maintain 'regular accumulation' even when capital is raised in small, frequent bursts. This change does not affect the company's existing at-the-market equity program, which allows for up to C$30 million in stock sales under a shelf prospectus.
As a result of this new arrangement, Matador's shares may start acting like a dilution-adjusted Bitcoin proxy, reacting more to crypto price swings than typical micro-cap stocks. However, the effectiveness of this 'bitcoin per share' narrative also depends on how quickly and at what price Matador issues new shares.
The company's C$0.025 shares have recently closed at a 52-week low on the TSX Venture Exchange, highlighting the trade-off between financing a crypto-linked treasury through new shares.