Zerostack reports $1.06B crypto holdings at 74% discount to share price

Zerostack Corp. valued its cryptocurrency holdings at $1.06 billion, or $18.19 per partially diluted share, a 74.1% discount to its $4.71 stock price.

"The market value of our cryptocurrency treasury relative to our current equity valuation represents an important data point that we believe investors should be able to evaluate transparently," Daniel Reis-Faria, chief executive officer of Zerostack, said.

The holdings comprise 925.9 million MemeCore tokens valued at $1.03 billion and 223.8 million 0G tokens worth $36 million, based on coinmarketcap.com prices at 10 p.m. EST on Aug. 23. On a fully diluted basis of 61.4 million shares, the crypto value is $17.33 per share, a 72.8% discount to the reference price.

The gap between the treasury value and the equity market capitalization could draw value investors and arbitrage interest, though the company cautioned that quoted prices may not reflect realizable proceeds given the size of its holdings relative to trading liquidity. The pre-funded warrants, which account for most of the dilution, remain unexercisable pending stockholder approval under Nasdaq rules.

Holdings and dilution

Zerostack's capitalization consists of about 21.8 million shares outstanding and 36.7 million pre-funded warrants, for 58.5 million shares on a partially diluted basis. The fully diluted count of 61.4 million adds common stock warrants, restricted stock awards, stock options and stock appreciation rights.

Management said the value of its pharmaceutical business and other non-cryptocurrency assets is more than sufficient to offset liabilities, making the crypto value per share a reasonable indication of minimum intrinsic value. Zerostack, the first Nasdaq-listed asset manager focused on decentralized AI, also runs a global pharmaceutical distribution business through subsidiary Phatebo GmbH.

Risks to the discount

The company stressed the discount is a point-in-time comparison and does not mean the stock is undervalued or would trade near the calculated crypto value. Cryptocurrency markets trade continuously and the reference prices may not reflect prices at which Zerostack could sell all or a substantial portion of its holdings, given the size relative to available liquidity, transfer restrictions and custody arrangements.

The discount could widen or narrow with moves in the stock price, crypto prices, changes in holdings or capitalization, and regulatory developments. Zerostack said it intends to keep providing investors with the composition and market value of its digital-asset holdings.

This article is for informational purposes only and does not constitute investment advice.