Shares sink as PIPE deal unlocks discounted stock for private investors
KindlyMD Inc. (NASDAQ: NAKA) saw its stock collapse by 55% on Monday, after CEO David Bailey told shareholders that upcoming volatility could unsettle markets and encouraged short-term traders to sell their positions.
The company — a healthcare firm turned Bitcoin-holding treasury vehicle — had filed on Friday to register a $200 million private investment in public equity (PIPE) offering, allowing discounted shares sold to private investors to begin trading.
“We expect share price volatility may increase for a period of time,” Bailey wrote in a letter to shareholders. “For those shareholders who have come looking for a trade, I encourage you to exit.”
Market reacts sharply
Investors responded by dumping shares. KindlyMD closed at $1.24, down from $2.78 on Friday, before bouncing slightly in after-hours trading with a 4.8% gain. The stock is now at its lowest level since February, months before the firm announced its Bitcoin accumulation plan and merger with Nakamoto Holdings, Bailey’s investment company.
Bailey framed the PIPE deal as a cleansing process:
- Short-term traders exit, reducing speculative pressure.
- Aligned long-term investors remain, backing KindlyMD’s Bitcoin-focused mission.
“This transition may represent a point of uncertainty for investors,” Bailey said, “but we look forward to emerging on the other side with alignment and conviction.”
Bitcoin holdings now exceed market value
The sell-off has pushed KindlyMD’s market capitalization below the value of its Bitcoin reserves. The company holds 5,765 BTC, worth about $665 million, according to BitcoinTreasuries.net. Yet its market cap fell to $466 million, giving the firm a multiple of net asset value (mNAV) of 0.7.
This disconnect highlights a broader concern flagged by analysts: many crypto treasury companies now trade below their Bitcoin holdings, raising questions about investor confidence in their corporate models.
Despite the setback, Bailey reiterated that KindlyMD’s mission is to build “the leading Bitcoin-native financial institution.” He emphasized that achieving this requires long-term strategy, disciplined execution, and creative thinking.
Trading volume surged to nearly 80 million shares on Monday, which Bailey described as a “day of transition.” He posted on X that the company was “upgrading our shareholder base from short-term traders to long-term investors.”
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.