EddieJayonCrypto
17 Sep 25
GD Culture Group’s shares dropped 28% after announcing a deal to acquire Bitcoin holdings from Pallas Capital, leading to investor panic and questions about the sustainability of corporate Bitcoin purchases. The company issued 39.2 million shares for 7,500 Bitcoin valued at $875.4 million, causing i...
GD Culture Group’s shares tumbled 28% on Tuesday after the company unveiled a blockbuster deal to acquire Bitcoin holdings from Pallas Capital Holding, a move that sparked investor panic and raised questions about the sustainability of corporate Bitcoin buys. The stock, now 97% off its 2021 peak, hit a 12-month low of $6.99, with its market cap shrinking to $117.4 million. The deal, finalized last Wednesday, sees GD Culture issuing 39.2 million shares to swap for Pallas Capital’s assets, including 7,500 Bitcoin (valued at $875.4 million). CEO Xiaojian Wang called the acquisition a “strong and diversified crypto asset reserve” play, citing Bitcoin’s rising institutional appeal as a store of value. But the market didn’t share his optimism. The company’s move to bolster its Bitcoin holdings—making it the 14th-largest publicly traded Bitcoin holder—fits a 2025 trend: over 190 publicly listed firms now hold crypto, up from fewer than 100 at the start of the year. The sector’s total value has ballooned to $112.8 billion, dominated by MicroStrategy’s 68% stake. Yet, momentum is cooling. Investors are growing wary of the “buy-and-hold” strategy, fearing that raising capital via stock sales or debt to buy Bitcoin could backfire if shares plummet. VanEck’s Matthew Sigel warned earlier this year that companies relying on at-the-market stock offerings to fund crypto purchases risk “capital erosion” if their shares trade near net asset value. GD Culture’s recent struggles underscore this risk. The firm had already faced a Nasdaq noncompliance warning in May over insufficient stockholder equity, and its May plan to raise $300 million via stock sales for crypto investments—including a Trump-themed memecoin—had already drawn scrutiny. The stock’s sharp decline reflects broader skepticism. While GD Culture’s AI-driven livestreaming and e-commerce business sounds cutting-edge, its reliance on Bitcoin as a financial lifeline feels precarious. The 28% drop isn’t just about the deal—it’s a warning shot for companies betting their future on crypto’s volatility. As the market grapples with whether Bitcoin treasury strategies are a savvy hedge or a risky gamble, GD Culture’s plight offers a cautionary tale: even the boldest moves can backfire when investor confidence wavers.