Osprey Bitcoin Trust Considers Sale or Merger Amid Plans to Maximize Unitholder Value
Summary:
Osprey Bitcoin Trust, on March 5, revealed its consideration of a potential sale or merger. If negotiations are unsuccessful, a deregistration and liquidation process will commence within 180 days. After the announcement, unit prices soared from $15.98 to $19.17. CEO Greg King addressed the company's plans to drive financial growth on X platform (formerly Twitter). Despite the initial disappointment from the tender proposal outcome, Osprey is exploring alternatives. The Trust's bitter rivalry with Grayscale, stemming from the latter's alleged domination via misleading advertising, was also highlighted. Osprey also runs over-the-counter Polkadot (DOT) and Solana (SOL) trusts, as well as a private BNB Chain Trust.
On March 5, Osprey Bitcoin Trust revealed that it is considering a potential sale or merger discussion. If these negotiations bear no fruit, the trust will proceed with deregistration and liquidation in a span of 180 days. Osprey acknowledged that fractional pieces of its BTC trust were being traded below the Bitcoin (BTC) value and is contemplating strategies to optimize the value for unitholders. This announcement had a significant influence on the price per unit as it rose from $15.98 on March 4 to $20.68 on March 5 before settling at $19.17.
The company's CEO, Greg King, discussed the attempts to generate profitable outcomes on X (formerly known as Twitter). The firm informed the United States Securities and Exchange Commission (SEC) of its plan to tender for a cash purchase of 20% of its units at the net asset value, minus taxes and fees, by filing Form 8-K on January 11. In King's own words,
“The ‘tender offer’ can also be regarded as a redemption program. The rules require it to be filed as a ‘tender offer’. Any eligible $OBTC shareholder adhering to the regulations gets NAV minus the fee at the conclusion of the tender as stipulated."
Unfortunately, the tender proposal did not elicit the response Osprey had anticipated, leading King to express his disappointment on X on Feb. 9 and hint at exploring "alternatives".
When Osprey launched its over-the-counter BTC trust in January 2021, it was viewed as a competitor to the larger entity, Grayscale. This platform provided accredited investors access to BTC within brokerage accounts. However, the cryptocurrency winter negatively impacted the trust, resulting in the majority of staff being let go by January 2023.
Osprey consequently filed a lawsuit against Grayscale in January 2023, citing deceptive advertising as the reason Grayscale held roughly 99.5% monopoly in a two-player market.
In addition to its BTC trust, Osprey also operates over-the-counter Polkadot (DOT) and Solana (SOL) trusts and a privately placed BNB Chain Trust (BNB).
In other related news, Bitcoin surges to $60k, and the US government relocates confiscated BTC, as reported in the Hodler's Digest from February 25 to March 2.
Published At
3/6/2024 12:18:20 AM
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