Shares of Nasdaq-listed GD Culture Group dropped sharply on Tuesday after the company revealed a major deal to acquire Bitcoin through a stock swap.
The livestreaming and e-commerce firm said it will issue around 39.2 million new shares to purchase all the assets of Pallas Capital Holding, which include roughly 7,500 BTC valued at about $875 million. The agreement was finalized last week.
Company chairman and CEO Xiaojian Wang said the acquisition is part of a long-term strategy to diversify its balance sheet with digital assets, highlighting Bitcoin’s rising role as an institutional reserve currency.
If completed, GD Culture would become one of the largest publicly listed corporate Bitcoin holders, ranking 14th globally. The firm currently operates AI-driven virtual influencers and social commerce platforms, with TikTok as a primary channel.
Stock reaction and investor concerns
Despite the strategic pivot, investors responded negatively. GD Culture’s share price fell more than 28% during regular trading hours to close at $6.99, before edging up slightly in after-hours activity. The decline marked the company’s steepest single-day drop in over a year and reduced its market capitalization to about $117 million. The stock remains down nearly 97% from its all-time high of $235.80 in February 2021.
Analysts say shareholder dilution was the likely driver behind the selloff. Issuing large amounts of new stock reduces the value of existing shares, often triggering skepticism about management’s capital strategy.
VanEck digital assets research head Matthew Sigel has previously cautioned that firms funding Bitcoin purchases through equity or debt run the risk of weakening shareholder value if their stock underperforms.
Crypto treasury strategy
This move follows GD Culture’s May announcement that it planned to sell up to $300 million worth of stock to fund digital asset purchases, including both Bitcoin and niche tokens such as the Trump-themed memecoin. The plan came soon after Nasdaq flagged the company for failing to meet minimum shareholder equity requirements.
The broader corporate Bitcoin treasury trend has accelerated this year, with more than 190 listed companies now holding BTC compared to fewer than 100 at the start of 2025. Still, momentum has cooled in recent months as markets debate the sustainability of financing strategies tied to crypto accumulation.
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