 shares plunged 28% after announcing an $875M Bitcoin acquisition, raising concerns about shareholder dilution and risks tied to its new crypto-focused strategy.){kind=link}
In a recent development, Nasdaq-listed livestreaming and e-commerce company GD Culture Group (GDC) saw its shares fall by 28% after announcing an ambitious plan to acquire a massive amount of crypto.
The company stated that it will acquire all the assets of Pallas Capital Holding in a share-for-assets exchange, including an astounding 7,500 Bitcoin worth $875.4 million, according to reports.
To finance the acquisition, GD Culture will issue almost 39.2 million shares of common stock, which would dilute the ownership of existing shareholders.
The acquisition was completed last Wednesday, but the market reaction has been severely negative as investors weighed the risks of this bold pivot.
Aiming to Build a Crypto Treasury
Xiaojian Wang, CEO and chairman of GD Culture, has stood up by saying that the Bitcoin purchase is consistent with the company’s objective to build a strong and diversified reserve of crypto assets.
Wang mentioned that by closing this deal, GD Culture is in a position to capitalize on the growing institutional acceptance of Bitcoin as both a reserve asset and a long-term store of value.
If carried through as anticipated, GD Culture would be the 14th largest publicly listed holder of Bitcoin and be part of a growing several companies that have adopted treasury or treasury-like models oriented around crypto.
GD Culture still has an active business doing the same thing it has done by using AI to create virtual influencers to brand for TikTok users to support livestreaming and e-commerce, but it is now clear the company is repackaging itself as a crypto company.
The Rise of Bitcoin Treasury Firms
GD Culture’s movement takes place, and a more general rise in publicly listed corporations adopting Bitcoin treasury strategies.
Just in 2025 alone, the number of firms has doubled to over 190, with collective holdings worth $112.8 billion.
The space is still highly reliant on Michael Saylor’s Strategy, which takes up almost 68% of BTC holdings across the entire space.
That said, the movement in this sector has slowed recently amid growing concerns around whether or not raising equity or debt for BTC and betting on future appreciation can continue without exposing investment to huge risk.
Nevertheless, GD Culture’s purchase emphasizes that firms are continuing to bet on Bitcoin as a long-term asset.
Also Read: London-listed Gold Miner Nativo Resources Announces Bitcoin Treasury, Share Price Jumps By 23%
Investor Backlash and Market Risks
Investor reaction to GD Culture’s announcement was exceptionally negative. The firm’s stock plunged 28.16% to $6.99 on Tuesday, its biggest one-day decline in at least a year.
Shares did rise 3.7% in after-hours trading, but the company’s market cap is only $117.4 million, which is substantially below its anticipated Bitcoin holdings.
This doesn’t help the company’s already troubled stock history, as shares are now trading 97% below their all-time high of $235.80 from February 2021.
Analysts have said previously that one of the issues with enormous stock issuances is that it dilutes shareholder value.
Earlier this year, VanEck’s head of digital asset research, Matthew Sigel, warned that if companies were using equity to pay for Bitcoin.
They would have problems if their stock price underperformed relative to their position in Bitcoin, as the Bitcoin holdings alone would not be sufficient to offset the capital dilution to shareholders.
Also Read: China’s Linklogis Share Price Surges 23% Following Announcement Of Partnership With XRP Ledger
A Growing Pattern of Treasury-Linked Share Drops
GD Culture is not the first entity to experience investor backlash occurring shortly after announcing a big purchase of Bitcoin. Similar situations have transpired in other markets.
Notably, on August 6th, Gatacre’s London-listed Satsuma raised $218 million in convertible note record rounds led by ParaFi and Kraken, with over £96 million worth of Bitcoin, according to UnoCrypto.
Just like the GD Culture share price, the Satsuma stock dropped more than 21% despite significant investor demand, as the market began to question whether the Bitcoin treasury model would work.
GD Culture’s announcement follows its May announcement, where it stated it would seek to sell up to $300 million in stock to build a crypto portfolio, including Bitcoin and the controversial “Trump” memecoin.
Meanwhile, GD Culture is grappling with compliance issues regarding Nasdaq.
The decline is illustrative of the risks that companies take after making significant investments in Bitcoin as a corporate treasury asset, particularly when it results from an equity financing issuance.