Bitcoin whale Pompliano's ProCap Financial repurchases shares to stabilize market value

Bitcoin whale Pompliano’s ProCap Financial (BRR) officially implements a stock buyback program. The company is reportedly the first publicly traded proxy financial firm. The buyback aims to address the long-term undervaluation of the stock compared to net asset value (NAV). BRR will repurchase 14,800 shares, holding 5,007 Bitcoins, representing about 35% of its NAV. In addition to Bitcoin, ProCap holds $70 million in cash and $100 million in convertible bonds. Pompliano stated that as long as market price is below NAV, the company will actively buy back shares, demonstrating strong liquidity to the market.

ProCap buyback to boost stock performance

ProCap Financial repurchased a total of 148,241 BRR shares on February 20. At approximately $2.30 per share, the total buyback amount was about $341,000. Compared to the company’s previous capital raising of over $750 million from investors, this buyback represents a small portion of its overall capital structure. Although the buyback size is modest, it reflects Pompliano’s attempt to improve market performance amid the current Bitcoin market downturn through capital recovery.

Reassuring investor confidence? CEO Pompliano says they will actively buy back undervalued shares

According to public data, the buyback price is about 35% below the company’s asset net value. CEO Anthony Pompliano said this transaction is equivalent to purchasing $1 worth of assets at a cost of about $0.65. Currently, ProCap Financial’s balance sheet includes 5,007 Bitcoins, $70 million in cash, and $100 million in convertible bonds. Despite the liquidity of its asset portfolio, the market valuation remains significantly below its book value.

Following the buyback announcement on Monday morning, BRR’s stock briefly rose to $2.35 in the US stock market. However, over the past year, the stock has fallen more than 82%. As the first publicly traded proxy financial company, ProCap Financial’s stock price is highly correlated with the cryptocurrency market, especially Bitcoin. Whether the buyback plan will be effective depends on future Bitcoin price movements and whether the company can further demonstrate transparency and liquidity in managing its assets.

Pompliano stated that as long as market prices stay below NAV, the company will adopt a more aggressive approach to buy back shares. This strategy typically indicates that management believes the current stock price does not accurately reflect the value of the company’s crypto and cash assets. By reducing the number of outstanding shares, the company aims to increase per-share net asset value. This approach is common among proxy financial firms and closed-end funds to address delays or biases in the valuation of underlying assets.

This article about Bitcoin whale Pompliano’s ProCap Financial buyback to stabilize market value first appeared on Chain News ABMedia.