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Bitcoin treasury firm Nakamoto owes Kraken $165 million, more than its market value, as Q3 operating revenue turns negative
Summary
David Bailey's bitcoin treasury company Nakamoto (NAKA) owes Kraken 165 million USDT on a loan backed only by its bitcoin, more than its roughly $104 million stock market value at Thursday's close, CoinDesk reported.
Under an amendment disclosed in an 8-K filing on Thursday, the 60 million USDT due Dec. 4 now matures Dec. 4, 2027, while the other 105 million USDT stays due June 30, 2027, and Kraken will count the net value of Nakamoto's bitcoin derivatives toward collateral tests, according to CoinDesk.
Nakamoto's third-quarter results showed $3.9 million in business revenue, but a $5.8 million net loss on bitcoin options pushed total operating revenue to negative $1.9 million, well short of the roughly $17.4 million analysts expected, Cointelegraph reported.
A $110.4 million gain from revaluing its bitcoin still produced $85.5 million in net income, and the shares fell about 6.5% in premarket trading Friday to $5.40, down about 62% year to date, per Cointelegraph.
Key facts
- 3,030 of Nakamoto's 4,283 bitcoin were pledged to Kraken at the end of September; at Friday's price under $69,000 they are worth roughly $208 million, about 126% of the debt, by CoinDesk's calculations.
- If the pledged collateral falls below a set maintenance level, Nakamoto must repay part of the loan, pledge more bitcoin or both; it has about 1,253 unpledged bitcoin, worth roughly $86 million.
- Nakamoto bought put options on 2,000 bitcoin at $55,000 that expire Dec. 25, before the debt comes due, and sold calls on 2,150 bitcoin at strikes between $80,000 and $110,000.
- "This amendment extends our runway and makes our collateral position more resilient," Nakamoto chief investment officer Tyler Evans said.
- The loan started last December at $210 million and 8% a year; Nakamoto sold 284 BTC in March and about 600 more in the second quarter, sending $45 million back to Kraken.
- Nakamoto reported a $15.8 million adjusted operating loss for the quarter, and its holdings fell to 4,283 BTC ($357.9 million) on Sept. 30 from 4,467 BTC at the end of June.
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