Key Takeaways:
- Fold sold $45 million in Bitcoin at roughly $71,000 per coin
- The company used $20 million to retire Bitcoin-collateralized debt
- Shares surged 162% as the restructuring left Fold debt-free on secured obligations
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Fold jumps 162% after selling $45M in Bitcoin to wipe out debt
Fold Holdings sold $45 million in Bitcoin to eliminate its secured debt, sending shares up 162% on Wednesday.
"By reducing financing risk and strengthening our balance sheet, we have ensured that short-term market volatility cannot stand in the way of executing our roadmap," Will Reeves, chief executive officer of Fold, said.
The Phoenix-based fintech company liquidated roughly $45 million of Bitcoin at an average price of about $71,000 per coin. It used $20 million of the proceeds to retire Bitcoin-collateralized debt and redirected the remaining $25 million toward growth initiatives, including its Bitcoin rewards credit card. The restructuring leaves Fold debt-free on its secured obligations.
The debt elimination removes monthly cash interest payments, which Fold said should improve its cash flow profile as new products come online. Shares traded at $1.10 as of Wednesday afternoon, still up more than 80% on the day, though down about 58% since the start of the year.
Fold's first-quarter revenue came in at $5.6 million, a 21% decline from a year earlier, according to the company's most recent earnings report. Recent product launches include a Bitcoin rewards credit card, a Bitcoin gift card, and a business-focused offering that lets employers pay crypto bonuses to staff.
Reeves said management views the Bitcoin credit card as one of the most significant long-term growth opportunities, and that the cleaner balance sheet positions the company to expand its cardholder base and pursue additional lending partnerships.
The move mirrors a broader trend among Bitcoin-heavy public companies reassessing their treasury strategies. MicroStrategy, the largest corporate Bitcoin holder, has also used debt markets to fund additional purchases, while Fold chose the opposite path — selling to achieve a debt-free structure ahead of what Reeves called "one of the most important growth periods in the company's history."
This article is for informational purposes only and does not constitute investment advice.
