David Bailey’s Nakamoto (NAKA) now owes Kraken more than the stock market says the whole company is worth, and it just bought itself another year to deal with it.
Nakamoto’s main business is holding bitcoin. It owes crypto exchange Kraken 165 million USDT, the dollar-pegged stablecoin issued by Tether, on a loan backed only by its bitcoin. Its shares closed Thursday at $5.79, giving the company a market value of about $104 million.
I was just thinking about this yesterday... what kind of bullshit patchover fix the Nala schmucks have come up with
If you are a bitcoin treasury company and your main (sole?) value prop to investors is that you will give them access to bitcoin and maybe even get them more bitcoin, but then you go and use your treasury of bitcoin as collateral for a loan, aren't you actually giving investors less bitcoin access?
(I suppose you could have used the loan to buy more bitcoin, which I assume is what Naka did -- what else are they gonna spend $165 million on? -- but this seems like a somewhat poor way to go about it. Surely Bailey could have gotten people to give him more money using fun constructions like STRC rather than resorting to something as pedestrian as a bitcoin loan.)
they/he certainly did, at the exact top of the hubris. So yea... if you leverage yourself at 8% interest and go long on an asset that then drops 50% and stays there, yeah, I mean you're pretty fuuuucke.d