Nasdaq-listed firm trades equity for 7,500 BTC, sparking dilution fears
GD Culture Group (NASDAQ: GDC) shares tumbled 28% on Tuesday, closing at $6.99, after the livestreaming and e-commerce company announced a deal to acquire 7,500 Bitcoin valued at roughly $875.4 million from Pallas Capital Holding.
The company said it would issue nearly 39.2 million common shares to complete the transaction, a move that will significantly dilute existing shareholder ownership. Despite a brief after-hours rebound of 3.7%, the decline marked GD Culture’s largest single-day drop in over a year.
Building a Bitcoin treasury
The acquisition makes GD Culture the 14th largest publicly listed Bitcoin holder, placing it among a growing group of companies adopting Bitcoin as a treasury reserve asset. “This acquisition will directly support our strategy to build a strong and diversified crypto asset reserve,” CEO Xiaojian Wang said, adding that Bitcoin’s institutional adoption is a key factor behind the move.
GD Culture operates livestreaming and e-commerce services, largely through platforms like TikTok, while also experimenting with AI-generated influencers. The pivot toward a crypto-focused treasury strategy underscores its shift to align with financial trends driving corporate interest in Bitcoin.
Investor pushback on dilution
However, analysts warn that funding Bitcoin purchases by issuing new shares may weaken shareholder value. “Companies raising capital through stock issuance for BTC face a risk: if their stock underperforms, the dilution may outweigh any upside from Bitcoin appreciation,” said Matthew Sigel, head of digital assets research at VanEck.
GD Culture’s stock is already down 97% from its all-time high of $235.80 in February 2021, leaving its current market capitalization at $117.4 million.
The deal comes amid a surge in corporate Bitcoin treasuries, with over 190 publicly traded firms holding BTC in 2025, up from fewer than 100 at the start of the year. Still, momentum has slowed in recent months as concerns mount over whether this model of capital-raising and Bitcoin accumulation is sustainable.
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.