Zhibao to Sell $220M in Stock for Bitcoin in Deal That Gives Buyer Control

Nasdaq-listed Zhibao Technology Inc., a Shanghai-based company that sells digital insurance products in China, is proposing to sell $220 million worth of stock for Bitcoin. The company announced Wednesday that it has signed a non-binding term sheet with Joyertech and Information OPC, which would receive approximately 3,500 BTC as payment for the shares.

The deal, known as a PIPE financing (Private Investment in Public Equity), is a private investment in Zhibao's publicly listed shares. However, there's a catch - the buyer would gain control of the company, designating a majority of the board members after the deal closes.

Zhibao, which trades as ZBAO on the Nasdaq, has faced financial struggles and recently received a deficiency letter from Nasdaq for trading below $1 per share. The stock price skyrocketed to $0.40 hours after the announcement, but receded back down to around $0.24.

The company's plan to receive Bitcoin as payment is part of the growing trend of companies holding digital assets on their balance sheets. Over 150 publicly traded companies now hold Bitcoin, although some have faced challenges and even shut down operations after announcing crypto treasuries.