Shares of KindlyMD Inc., a company that transitioned from healthcare to Bitcoin holdings, experienced a dramatic decline on Monday, with stock prices plummeting by over 55%. This sharp drop came after CEO David Bailey issued a warning in a shareholder letter about anticipated increases in “share price volatility,” advising short-term investors to consider selling their shares.
Bailey’s letter highlighted details of a newly registered $200 million discounted share sale to private investors, a move that enabled those investors to trade their shares without restrictions. This private investment in public equity (PIPE) offering has raised alarms among analysts regarding the rising trend of crypto treasury firms, as the market value of these companies increasingly lags behind their crypto asset valuations.
By the close of trading, KindlyMD’s stock, trading under the ticker NAKA, settled at $1.24, marking its lowest share price since early February. The decline in stock value follows the company’s recent mission to hold Bitcoin for the long term after merging last month with Nakamoto Holdings, owned by Bailey.
In his communication, Bailey acknowledged that the influx of PIPE deal shares would create heightened volatility but framed it as an opportunity to strengthen the company’s shareholder base by attracting investors who are committed to its long-term vision. He expressed optimism about transitioning from short-term traders to long-term supporters.
Despite the turbulent trading day, which saw close to 80 million shares exchanged, Bailey conveyed gratitude for the backing the company has received and emphasized his eagerness to engage with the new shareholders gained through this transition.
As a result of the recent share drop, KindlyMD’s market capitalization has fallen below the value of its Bitcoin holdings, which consist of 5,765 BTC valued at over $665 million, compared to the company’s market cap of approximately $466 million. Bailey remains resolute, stating that the company’s goal is to become the premier Bitcoin-native financial institution, emphasizing that achieving this mission requires strategic long-term planning and innovative execution.
The situation indicates a challenging period ahead for KindlyMD as it navigates market fluctuations while trying to align its shareholder interests with its ambitious vision in the cryptocurrency space.
