The stock price of healthcare company KindlyMD fell on Tuesday after the company announced a $5 billion market equity offering plan to raise funds to expand its Bitcoin holdings.
The healthcare service company recently merged with Nakamoto Holdings and adopted a Bitcoin (BTC) treasury strategy, stating on Tuesday that it has submitted an application to the U.S. Securities and Exchange Commission (SEC) to issue and sell up to $5 billion in common stock through its planned offering.
The company plans to use the proceeds for general corporate purposes, including BTC accumulation, working capital, acquisitions, capital expenditures, and project investments.
"This move is a natural next phase of our growth plan, just two weeks after KindlyMD successfully completed its merger with Nakamoto and our first purchase of Bitcoin," said David Bailey, Chairman and CEO of KindlyMD. Bailey is also a cryptocurrency policy advisor to the Trump administration.
The company acquired 5,744 BTC at a weighted average price of $118,204 per Bitcoin on August 19, totaling approximately $679 million.
"We need some time to build the liquidity required to complete this plan, but it will be a key tool in executing our strategy," Bailey stated on X.
When asked about the transparency of this strategy compared to Michael Saylor's Strategy company, Bailey said:
The stock sale will be conducted through multiple sales agents, including TD Securities and Cantor, and the shares will be sold at current market prices on exchanges like Nasdaq.
Investors are concerned about the prospects of the stock offering, and KindlyMD (NAKA) shares plummeted on Tuesday, closing down 12% and further dropping 2.7% in after-hours trading to $7.85.
However, KindlyMD's stock price has soared 330% since early May, around the time the company announced its Bitcoin strategy plan, rising 550% year-to-date.
Meanwhile, Canadian psychedelic truffle cultivation company Red Light Holland has become the latest company to update its Bitcoin investment strategy.
The company announced on Tuesday that it has purchased 10,600 shares of BlackRock's iShares Bitcoin Trust ETF (IBIT) and is working with "a leading exchange" to leverage Arch Public's algorithmic trading strategies.
Cryptocurrency influencer and Red Light Holland's Chief Cryptocurrency Advisor Scott Melker stated that the company "is taking a balanced and responsible approach to Bitcoin investment, combining ETF exposure with the next step of implementing advanced trading strategies through Arch Public."
Related: SharpLink increased its holdings of Ethereum (ETH) worth $252 million last week and still has a $200 million cash reserve.
Original article: “KindlyMD Announces $5 Billion Stock Offering to Fund Bitcoin (BTC) Treasury, Stock Price Drops”
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