Strive Asset Management and Asset Entities announced the signing of a $750 million private investment in public equity (PIPE), with an additional $750 million in potential financing available upon the exercise of warrants, which could increase total potential proceeds to $1.5 billion. Upon the closing of the deals, the proceeds are expected to support the company’s first wave of Bitcoin acquisitions, to set up Strive Asset Management as the first Bitcoin treasury company focused on long-term Bitcoin outperformance through the implementation of alpha-generating strategies along with the company’s plans to implement known beta strategies used by incumbent Bitcoin treasury corporations.
A group of leading institutional investors and Strive’s management team, including CEO Matt Cole, participated in the financing, which is expected to close concurrently with the deal under the merger agreement between Strive Asset Management and Asset Entities. Strive Asset Management’s first wave of alpha-generating Bitcoin accumulation strategies includes:
1.) Unlocking discounted cash through acquisitions of biotech companies trading below their net cash position, which Strive views as a multi-billion dollar opportunity, and one where Strive believes it has a distinctive competitive advantage due to its founding and management team.
2.) Buying distressed Bitcoin claims, such as Mt. Gox claims, at discounts to Bitcoin NAV, a market opportunity estimated to be over 75,000 BTC, through Strive’s recently announced strategic partnership with 117 Partners.
3.) Positioning itself to become a market leader in purchasing bottom tranches of structured Bitcoin credit vehicles at discounted prices.
The PIPE investment was priced at $1.35 per share of common stock, representing a 121% premium to the closing price of Asset Entities immediately before its merger announcement with Strive Asset Management. And the exercise price for warrants in this PIPE transaction is $1.35 per share. Strive elected not to raise any debt financing in this transaction, to preserve maximal leverage capacity in the future to optimize returns for common equity.
The financing transaction is subject to customary closing conditions, including approvals from the shareholders of both Strive and the Asset Entities.
Advisors: Cantor Fitzgerald served as the exclusive financial advisor to Strive. And Cantor Fitzgerald served as the exclusive placement agent for the PIPE financing. Davis Polk & Wardwell is acting as legal advisor to Strive. DLA Piper acted as legal advisor to Cantor Fitzgerald. Bevilacqua is acting as legal advisor to Asset Entities.
KEY QUOTE:
“Most Bitcoin treasury companies are valued based on multiples to their Bitcoin holdings, which makes sense because their strategies are tied to leveraged beta to Bitcoin. By contrast, our alpha-generating Bitcoin accumulation strategies are designed to drive sustained outperformance relative to Bitcoin itself, which requires a new valuation framework.”
Matt Cole, CEO of Strive
