Brazilian Meliuz Pursues Bitcoin Treasury Expansion Through Share Sale
By: Eliza Bennet
In a bold move mirroring the strategies of prominent firms like MicroStrategy, Brazilian financial services company Meliuz has announced the sale of shares amounting to $26 million. This step, primarily aimed at expanding its Bitcoin holdings, echoes a growing trend among corporations to include digital assets in their treasury operations. Meliuz, well-known for its cashback offerings, intends to leverage this capital to bolster its reserves in the cryptocurrency market while navigating a strategically crafted equity sale designed for professional investors. This venture marks Meliuz as the first publicly traded Brazilian firm to embrace Bitcoin in such a capacity, a decision made earlier in March when the company allocated 10% of its cash reserves to Bitcoin.
The decision to undertake this share sale comes alongside a notable 7% decline in the trading value of Meliuz's shares, reflecting investor reactions marked with a degree of skepticism yet significant interest. The share sale involves issuing over 17 million new ordinary shares under Brazil's expedited "automatic" registration channel. The pricing of these shares will be determined through a book-building process, a method which allows investors, including retail shareholders, to participate equally in this capital-raising initiative. While the base deal stands to raise $26 million, Meliuz has the option to increase the offer by up to 200%, depending on market demand, though this option has yet to be activated.
CEO Israel Salmen has articulated the share sale and subsequent Bitcoin acquisition as part of a larger structural adjustment to refine the company’s financial framework. By investing in Bitcoin, Salmen suggests that Meliuz is optimizing its balance sheet while maintaining stability in its core operations and dividend policies. The decision follows a previous purchase of 45.72 Bitcoins at a significant investment of approximately $4.1 million, marking Meliuz's initial foray into Bitcoin holdings. Despite current market enthusiasm, indicated by a substantial increase in stock price since the March announcement, Salmen has conveyed a long-term commitment to these digital assets rather than short-term speculation.
As Meliuz embarks on its cryptocurrency-focused strategic realignment, it plans to convene a shareholder meeting to authorize increased capital, ensuring seamless operations as more investors exercise their purchase rights. The company ended the first quarter with substantial cash reserves and financial investments, suggesting further Bitcoin accumulation is on the horizon, provided Meliuz continues to adhere to its 10% cash reserve policy in digital currencies post-equity sale. Meliuz's innovative approach could potentially set a precedent within the region, encouraging other firms to explore cryptocurrency as a viable treasury alternative.
