Simply put
- ProCap Financial has repurchased more BRR shares, as its market value remains below its asset worth.
- Anthony Pompliano’s firm currently holds 5,007 BTC, which is around $325 million.
- The stock price has plunged 85% from its peak last year.
ProCap Financial, associated with cryptocurrency figure Anthony Pompliano, is engaging in share buybacks to enhance shareholder value and align its market net asset value (mNAV) closer to 1.
The company acquired 148,241 shares of BRR stock, totaling about $359,000 at the close of trading. Presently, its NAV, defined by deducting convertible debt from its cash and Bitcoin assets, is roughly $305 million, while its market capitalization is below $202 million.
Pompliano, who serves as chairman and CEO, expressed, “I recently bought $1.00 of our stock for about $0.65. If the market sells our shares deeply discounted to NAV, we intend to aggressively repurchase our own shares.”
All good investors know they should acquire assets for less than their value. We are repurchasing shares because they’re trading at a significant discount to our NAV. We will continue to actively buy stocks as long as they remain underpriced.
— Anthony Pompliano
Pompliano further emphasized, “Smart investors understand it’s wise to buy assets below their value, and BRR stock is no exception.”
The company is not alone in its buyback strategy; other digital asset firms have also engaged in share repurchases when mNAV dips below 1.
Given that the company’s market cap is under its net assets’ value, buying its stock is viewed as more beneficial for shareholders than acquiring cryptocurrency assets directly.
Historically, large crypto companies like Strategy (formerly MicroStrategy) commanded premiums for their crypto holdings. However, as significant cryptocurrencies like Bitcoin and Ethereum have seen price drops, the premiums have diminished, resulting in most prominent crypto firms experiencing mNAV below 1.
ProCap, which possesses 5,007 BTC valued at about $325 million, started buying back shares in December. By early this month, it had repurchased roughly 2% of BRR’s total shares.
Pompliano invested $1 million of his own funds into stock purchases, stating that having “skin in the game” is crucial for leadership. He will take a $1 salary, with no personal stock compensation unless ProCap’s share price hits $15.
ProCap did not provide a prompt comment when contacted.
As for BRR stock, it ended Monday’s trading at $2.42, a significant decline of around 76% over the past six months and 85% since its peak last year. To trigger the promised stock award, Pompliano’s stock would need to increase by about 520%.
In the meantime, Bitcoin dropped nearly 4% over the last day, currently around $64,888, which is almost 49% lower than its October high of over $126,000.
