TLDR
- KindlyMD stock dropped 12% after filing $5B equity offering to fund Bitcoin purchases
- Company bought $679M worth of Bitcoin (5,744 BTC) at $118,204 average price on August 19
- Stock up 550% year-to-date despite Tuesday’s decline to $7.85
- Filing gives company flexibility to raise capital for Bitcoin treasury strategy
- Analysts worry Bitcoin-focused companies may hurt altcoin market liquidity
KindlyMD shares tumbled 12% on Tuesday following the healthcare company’s announcement of a $5 billion at-the-market equity offering program. The company plans to use proceeds from stock sales to expand its Bitcoin treasury holdings.
The Securities and Exchange Commission filing allows KindlyMD to issue up to $5 billion in common stock through multiple sales agents. These include TD Securities, Cantor Fitzgerald, and B. Riley Securities handling distribution.
KindlyMD recently completed a merger with Nakamoto Holdings and adopted Bitcoin as its primary treasury reserve asset. The company made its first major cryptocurrency purchase on August 19, acquiring 5,744 Bitcoin for $679 million at an average price of $118,204 per coin.
CEO David Bailey, who also advises the Trump administration on crypto policy, called the offering “the natural next phase of our growth plan.” Bailey emphasized the program will provide critical tools for executing the company’s Bitcoin accumulation strategy.
Stock Performance Despite Volatility
While Tuesday’s decline concerned investors, KindlyMD stock remains a strong performer this year. Shares have gained 330% since May when the company first announced its Bitcoin strategy plans.
The stock closed at $7.85 after falling an additional 2.7% in after-hours trading. Despite the recent pullback, shares are up 550% year-to-date, making it one of the top-performing stocks with a Bitcoin treasury strategy.
The SEC filing establishes KindlyMD as a Well-Known Seasoned Issuer, providing more flexibility in capital markets access. This designation allows faster capital raising but creates pressure from large issuance volumes and market volatility risks.
Growing Bitcoin Treasury Trend
KindlyMD joins other companies adopting Bitcoin treasury strategies. Red Light Holland, a Canadian psychedelic company, updated its Bitcoin approach by purchasing 10,600 shares of BlackRock’s Bitcoin ETF on Tuesday.
The trend toward corporate Bitcoin adoption has accelerated since Bitcoin ETF approvals in early 2024. Trump administration pro-crypto policies have further normalized cryptocurrency exposure for public companies.
However, analysts express concerns about market concentration. Kelvin Koh from Spartan Group warns that Bitcoin-focused digital asset treasuries may drain liquidity from other cryptocurrencies.
“While DATs bring liquidity to the assets they target, this may be at the expense of the wider altcoin market,” Koh explained. The model’s heavy reliance on equity raises creates high volatility exposure that could force asset sales during market downturns.
KindlyMD plans to use offering proceeds for general corporate purposes including working capital, acquisitions, and capital expenditures beyond Bitcoin purchases. The company will distribute shares at prevailing market prices on exchanges like Nasdaq through its authorized underwriters.
