Aquis-listed investment firm NFT Investments PLC (AQSE:NFT) has outlined a strategy to return capital to its shareholders and rein in its growing share price discount to net asset value (NAV), which currently stands at 58%.
NFT Investments’ directors have decided to swap their entire liquid cryptocurrency positions worth £28 million – representing 90% of NAV – following the next bitcoin halving scheduled for April 2024.
‘Bitcoin halving’ halves the rate at which the benchmark cryptocurrency is minted, historically coinciding with a rally in the asset’s spot price.
The company intends to achieve a shareholder return by purchasing its own shares through a purchase offer where the shareholders will have the opportunity to sell shares on a pro-rata basis.
A purchase of shares through a tender offer will be subject to both shareholder approval and consent from the court.
This goal of returning shareholder funds will be accompanied by a quarterly trading update where NFT Investments will publish its holdings of all tokens and prices on the first business day of each quarter beginning April 3, 2023.
Chairman Jonathan Bixby said: “Our focus has always been on maximizing shareholder returns and it has become clear that a commitment to return capital in the form of our growing liquid crypto portfolio (2.87p per share) is the best way to do that given our continued discount to NAV.
“We are delighted with our timing and subsequent positioning of our crypto treasury, which is now majority invested in liquid crypto assets such as BTC and ETH.
“We remain in service to maximize shareholder returns and will keep the market regularly updated moving forward towards the next BTC halving.”
Security update
In the same statement, NFT Investments assured investors that it had no exposure to Silicon Valley Bank’s collapse and holds all of its crypto assets in cold storage wallets in secure locations across multiple continents.
Because of this, the Group has no exposure to cryptocurrency exchange risk.
The company also announced that progress has continued in the recovery of USDC stablecoins lost from a phishing attack in January.
NFT Investments has been granted the right to serve legal documents on the now-frozen USDC wallet and expects a summary judgment to be completed within 60-90 days.
The group “remains positive that it will recover all funds as part of this legal process”.
