Investment holding company Nilam Resources intends to purchase 24,800 BTC ($1.75 billion). The initiative’s partner will be telecommunications provider Xyberdata Ltd from Mauritius.
According to its website, the company aims to profit from investments by acquiring, holding, and actively managing a portfolio of firms across various sectors, including fintech, medtech, climate tech, and others.
A press release states that Xyberdata (formerly 101 Systems Ltd) has built a network since 2011 consisting of 80,000 km of optical fiber and 1,800 MPLS endpoints across Africa, Asia, Europe, North America, Oceania, and South America.
To purchase the digital gold, Nilam Resources signed a letter of intent to acquire 100% of the shares of the special purpose firm MindWave, which will hold the coins. These assets will serve as collateral for raising capital for investments in high-yield projects.
Nilam Resources will make the payment through the issuance of an undisclosed number of Class C preferred shares at a discount.
The securities will grant holders the right to convert “upon listing on NASDAQ or another national exchange or upon other specified liquidity events.”
Only qualified investors can become holders of the preferred shares.
The terms of the deal will be detailed in one or more definitive agreements.
Community Reacts with Skepticism
Adamant Capital founder Tuur Demeester described it as a “stunt with dying “penny stocks“.”
I removed my tweet about that gold explorer buying 24k BTC, after a commenter pointed out that it’s indeed a stunt from a dying penny stock (market cap of $5M). Perhaps it’s a harbinger of what will come, but this, indeed, is _not_ huge news.
(press release:… pic.twitter.com/Vd4p4Dpm6d
— Tuur Demeester (@TuurDemeester) March 25, 2024
Max Keiser, advisor to the President of El Salvador, saw the initiative as an attempt at a Pump & Dump.
Looks like a pump ‘n dump, but maybe memers jack market cap up to billions and they pull it off. https://t.co/5ZMxTYLZ2C
— Max Keiser (@maxkeiser) March 25, 2024
Such comments are not unfounded. According to Finance.Yahoo, Nilam Resources’ market capitalization is $925,000. The firm’s website states a figure of $23.3 million. Both figures are orders of magnitude lower than the market value of 24,800 BTC ($1.75 billion).
It is impossible to assess Xyberdata Ltd’s financial capabilities given its non-public status.
Update: CEO of Nilam Resources Ron McIntyre resigned following a more than 1500% surge in the company’s stock price in light of the announcement to purchase 24,800 BTC, reports Protos.
The securities rose from $0.0017 to $0.2656. Nilam Resources’ market capitalization increased to $71.23 million.
According to the publication, the press release about the upcoming deal was issued without McIntyre’s knowledge. This led to his departure from the company. He explained his decision as the management executing a Pump & Dump scheme.
“FINRA will investigate Nilam Resources,” he predicted.
OTC Markets Group — the operator of the platform for trading over-the-counter stocks — labels Nilam Resources (NILA) as Caveat Emptor.
This term refers to the principle in commercial transactions where the buyer assumes the risk associated with the quality of goods and the terms of the deal, meaning they are responsible for verifying the quality of the product.
The glossary page states that the status is assigned when there are “public interest concerns.” These may be triggered by spam distribution, questionable stock promotion, any known investigation, suspension of licenses, or any other disruptive corporate actions.
According to BitcoinTreasuries, public companies have acquired a total of 307,411 BTC, while private ones have acquired 516,571 BTC. They account for 1.46% and 2.46% of the total coin supply, respectively.
In March, the President of El Salvador, Nayib Bukele, published the address where 5,689.69 BTC (~$406.6 million) are stored.