Nasdaq-listed GD Culture Group has acquired 7,500 Bitcoin as part of a share exchange agreement with Pallas Capital Holding, a British Virgin Islands-registered company. The livestreaming and e-commerce company issued 39.2 million shares to complete the $875.4 million acquisition, which was finalized last Wednesday.
With this acquisition, GD Culture becomes the 14th largest corporate Bitcoin holder, surpassing Galaxy Digital Holdings which holds 6,894 BTC. The company's CEO Xiaojian Wang stated this move supports their initiative to "build a strong and diversified crypto asset reserve by acquiring scalable, high-value digital assets." He added that these assets are "free and clear of any encumbrances" and will help execute their digital asset strategy with stability and growth potential.
However, investors reacted negatively to the news, with GD Culture's shares plunging 28% on Tuesday - the largest single-day drop in over 12 months. The stock fell to $6.99 before clawing back slightly after hours, but remains down 97% from its February 2021 high of $235.80. The company's market cap now sits at just $117.4 million.
Market experts like VanEck's head of digital assets research Matthew Sigel have warned that issuing stock near net asset value to fund Bitcoin purchases can be "extractive" rather than strategic, potentially eroding shareholder value if market sentiment turns sour. This concern is particularly relevant given that GD Culture received a Nasdaq warning in May for falling below the $2.5 million minimum equity requirement.
The move aligns GD Culture with a growing trend of corporate Bitcoin treasury adoption, with over 190 publicly listed firms now holding Bitcoin collectively amounting to over 1 million BTC. MicroStrategy remains the dominant player with 636,505 BTC, while new entrants like XXI (founded by Strike CEO Jack Mallers) have amassed 43,514 BTC.