Crypto Treasury Growth Does Not Always Lift Assets Per Share
Edited by Steinar Vigdel Kolnes, Editor, Oslo
Issuing shares can expand a company's crypto holdings while reducing the amount backing each share, depending on the sale price relative to net asset value.
A company can add cryptocurrency to its treasury without increasing the amount attributable to each share. The effect on shareholders depends on how new purchases are funded, particularly when the company sells additional common stock.
According to The Defiant, issuing shares at a price above net asset value per share can increase assets per share. In that case, the proceeds add proportionally more value than the issuance adds to the share count.
Selling shares below net asset value can have the opposite effect, diluting existing holders even if cryptocurrency prices stay flat. Total treasury holdings may rise, but those assets are spread across a larger number of shares.
Source: The Defiant
