Aquis-quoted investment firm NFT Investments PLC (AQSE:NFT) has outlined a strategy to return capital to its shareholders and rein in its widening share price discount to net asset value (NAV), which currently stands at 58%.
NFT Investments’ directors have decided to trade out the entirety of its £28mln worth of liquid cryptocurrency positions – representing 90% of its NAV – after the next bitcoin halving scheduled for April 2024.
‘Bitcoin halving’ halves the rate at which the benchmark cryptocurrency is minted, and historically coincides with a rally on the asset’s spot price.
The company intends to achieve shareholder returns by purchasing its own shares through a tender offer under which shareholders would have the opportunity to sell shares on a pro-rata basis.
A purchase of shares by tender offer would be subject to both shareholder approval and the consent of the court.
This goal of returning shareholder funds will be accompanied by a quarterly trading update in which NFT Investments will publish its holdings of all tokens and prices on the first business day of each quarter beginning on 3 April 2023.
Executive chairman Jonathan Bixby said: “Our focus has always been on maximising shareholders return and it has become clear that a commitment to returning capital in the form of our growing liquid crypto portfolio (2.87p per share) is the best way to do so given our continued discount to NAV.
“We are delighted by our timing and the subsequent positioning of our crypto treasury which is now a majority invested in liquid crypto assets like BTC and ETH.
“We remain in service to maximising shareholder return and will keep the market regularly updated moving forward towards the next BTC halving.”
Security update
In the same statement, NFT Investments reassured investors that it had no exposure to Silicon Valley Bank’s collapse and is holding all its crypto assets in cold storage wallets in secure locations across multiple continents.
Because of this, the group has no exposure to cryptocurrency exchange risk.
The company also announced that progress has continued in the recovery of USDC stablecoins lost from a phishing attack in January.
NFT Investments has been granted the right to serve legal documents to the now-frozen USDC wallet and anticipates that summary judgement will be completed in 60-90 days.
The group “remains positive that it will recover all the funds as part of this legal process”.
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