As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week’s top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.
STRATEGY BUYS MORE BITCOIN: Strategy (MSTR) announced updates on Monday with respect to its at-the-market offering programs and bitcoin holdings. The company purchased 705 bitcoin during the period of May 26 to June 1 at an aggregate purchase price of $75.1M. Strategy now holds 580,955 bitcoin.
TRUMP MEDIA FILES REGISTRATION STATEMENT FOR BITCOIN ETF: On Thursday, Trump Media and Technology Group (DJT) announced the filing with the U.S. Securities and Exchange Commission of the initial registration statement on Form S-1 for the Truth Social Bitcoin ETF. The ETF will hold bitcoin directly and offer its shares to investors, aiming to reflect bitcoin’s price performance. Crypto.com will act as the ETF’s exclusive bitcoin custodian, prime execution agent and liquidity provider. The launch of the Truth Social Bitcoin ETF is pending effectiveness of the Registration Statement as well as approval of a Form 19b-4 filing with the SEC. Upon launch, the Shares will be listed on NYSE Arca. Yorkville America Digital acts as the sponsor of the ETF.
Additionally on Thursday, Trump Media announced it has filed a registration statement on form S-3 with the U.S. Securities and Exchange Commission related to debt and equity subscription agreements recently entered into with approximately fifty investors that yielded approximately $2.3B in total proceeds. The proceeds will be used for the company’s creation of a bitcoin treasury and for general corporate purposes. In accordance with registration obligations in the previously-disclosed agreements, the Registration Statement seeks to register for resale by the investors approximately 56M shares of equity and 29M shares underlying convertible notes. Additionally, having recently become form S-3 eligible, Trump Media is taking the customary step of including within the Registration Statement a universal shelf.
CEO Devin Nunes said, “These activities will provide the company with the capital, assets, independence, flexibility, and security we need to fulfill our goals of rapid expansion, guaranteeing a wide array of ways to access the capital markets when it’s most advantageous to do so. We’re systematically putting in place all the elements we need to grow the company according to our plans, acquire crown jewel assets, and draw more customers and users into the patriot economy.”
MAWSON INFRASTRUCTURE APPOINTS INTERIM CEO: In a Thursday regulatory filing, Mawson Infrastructure Group (MIGI) reported it had provided Rahul Mewawalla with notice that termination of his employment as CEO and President of the company for “Cause”, based on conduct specified in the notice, will be considered at a future meeting of the company’s Board of Directors, at which the Board will determine whether his conduct constitutes Cause sufficient to terminate Mewawalla in accordance with the terms of his employment agreement. Mewawalla’s employment agreement with the company provides for a cure period, which will end on June 14. On June 2, the Board determined to place Mewawalla on administrative leave from his position as CEO and President and appointed Kaliste Saloom to serve as Interim CEO. Saloom has served as General Counsel and Corporate Secretary since July 1, 2024.
HUT 8 INITIATED WITH BUY: On Thursday, Roth Capital initiated coverage of Hut 8 (HUT) with a Buy rating and $25 price target. Hut 8 is transforming into a power-first digital infrastructure platform, with 1.0GW energized, 2.6GW under exclusivity, and long-term growth visibility from bitcoin hosting and high-performance computing colocation, the analyst said. The firm added three HPC sites position the company to benefit from artificial intelligence demand, offering 60%-plus adjusted EBITDA margins. The combination of highly visible colocation agreements in bitcoin and HPC provides Hut 8 a strategic advantage, leading to margin expansion and re-rating potential with strategic execution, contended Roth.
ANALYST CALLS GAMESTOP, STRATEGY VALUATION DISPARITY ‘BAFFLING’: On Thursday, Wedbush reiterated an Underperform rating on GameStop (GME) with a $13.50 price target after the company last week disclosed that it purchased 4,710 bitcoin, “following the MicroStrategy playbook.” However, Strategy currently trades 1.75-times its bitcoin holdings, while GameStop trades at 2.4-times cash value, suggesting that investors value GameStop’s entry into bitcoin at the same premium they assign to Strategy shares, but value GameStop’s core operations at $8 per share, the analyst said. The firm added that while it is likely GameStop will convert more of its cash into bitcoin, the disparity in valuation between company and Strategy “is baffling.” Both companies provide bitcoin investors the ability to use margin to invest in crypto, but GameStop’s holdings “are literally 1% as great as MSTR’s,” according to Wedbush. The firm believes GameStop’s entry into the trading card business has delivered “modest success,” but it sees no potential for a rebound in the company’s core business.
OTHER CRYPTO NEWS:
CRYPTO STOCK PLAYS: Publicly traded companies in the space include Bit Digital (BTBT), Coinbase (COIN), Core Scientific (CORZ), Greenidge Generation (GREE), Mara Holdings (MARA), Strategy, Riot Platforms and TeraWulf (WULF).
PRICE ACTION: As of time of writing, bitcoin dropped roughly 1% this week to $104,449 in U.S. dollars, according to CoinDesk.
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