This CFO is betting on Bitcoin ‘Bividends’
After a company in the crypto and blockchain ecosystem introduced “Bividends,” its stock price received a boost.
BTCS Inc., focused on digital assets and blockchain technologies, recently announced it will be the first Nasdaq-listed company to pay a Bividend, a dividend payable in Bitcoin to shareholders. BTCS intends to pay 5 cents per share in Bitcoin. Investors not interested in a Bividend can receive a cash dividend of 5 cents.
Founded in 2013, BTCS (Nasdaq: BTCS) specializes in blockchain infrastructure operations and provides data analytics tools for crypto portfolios. The company has been contemplating the Bividend since 2015 when it bought the rights to bividend.com. The management team and board decided now is the time because “we’re at a point where we want to demonstrate our true value to our shareholders,” BTCS CFO Michael Prevoznik told me.
At the end of 2021, the market was valuing BTCS “at less than the value of our balance sheet assets,” he says. “Our stock was trading at $3.14 per share at the end of the year,” he explains. “However, the fair market value of our cash in crypto alone was worth $3.56 per share.”
The market was “essentially giving zero value to our operations,” Prevoznik says. The company’s preliminary unaudited revenue for 2021 is $1.2 million, and BTCS paid off $2 million of debt in 2021, currently holding no debt on its balance sheet, he says. “While the Bividend was something that we have been working on in advance of those numbers, the timing lined up,” Prevoznik says. On Jan. 4, the BTCS stock price closed at $3.02. But the day of the Bividend announcement, Jan. 5, the stock price reached $4.36. On Monday, it closed at $4.66.
Meanwhile, Bitcoin fell below $40,000 on Monday morning for the first time since September. It rebounded, reaching over $40,000 shortly after. However, it’s a steep decline from the crypto’s high of almost $67,000 just two months ago, Fortune reported, noting that an investor would have done better buying a Nasdaq 100 index fund over the past four years. Will this roller coaster ride make shareholders think twice about Bividends?
“I think the volatility you’re seeing right now is no different than the volatility that’s existed throughout all of Bitcoin’s existence,” says Prevoznik, who joined BTCS in December. The company’s ex-dividend and record dates are not until mid-March to give shareholders time to assess if they want to receive Bividends, and if so, set up their crypto wallets, he says. And two months from now, “you don’t know what’s going to happen [with] the price of Bitcoin,” Prevoznik says. But the purpose of the Bividend is to give BTCS shareholders an option similar to employees or even professional athletes who choose to receive their salary payments in crypto instead of cash, he says.
I asked Marc P. Bernegger, co-founder of the crypto hedge fund AltAlpha Digital, his thoughts on Bividends. “I think the approach of BTCS is very unique and interesting,” says Bernegger, who has been in the digital asset space since 2012. “It’s literally a hybrid way to get exposure to Bitcoin, and the fact that this Bividend is offered by a Nasdaq-listed company is a strong signal to the market.” He also thinks others will follow. “I could imagine several listed companies [making available] similar offerings in the future, especially crypto related ones like crypto miners,” Bernegger says.
Investing in the crypto asset market can’t be ignored, says Prevoznik. He previously spent almost a decade at PwC specializing in audit in the asset management industry. “With the giant uprise in 2021 alone, the increase in the market cap of cryptocurrency assets skyrocketed,” he says.
See you tomorrow.
The TIAA Financial Wellness Survey released on Jan. 10 gauges workers' experiences with employer financial wellness programs. The findings are based on a survey of 3,008 Americans ages 18 and over. More than half of respondents agreed that employers have a responsibility to help employees improve and maintain their financial wellness, according to the survey. About 31% of respondents said retirement is the most common area offered for assistance. Meanwhile, just 13% said debt management coaching is offered.
Courtesy of TIAA
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