ProCap disclosed Monday that it acquired 450 Bitcoin (BTC) during the recent market pullback, bringing its total holdings to 5,457 BTC. The additional purchase also helped reduce the company’s average cost basis per coin.
At the same time, ProCap said it repurchased 782,408 of its shares over the past 10 days at prices trading significantly below its calculated NAV per share, narrowing the discount between market price and intrinsic value. The Nasdaq-traded shares were up 7.17% at last look in Monday morning trading, to $2.84 per share, according to Yahoo Finance.
ProCap emerged last year as a Bitcoin-native financial services company, raising more than $750 million in its initial funding, before going public through a SPAC merger.
The combined moves show ProCap increasing its Bitcoin exposure while attempting to address the discount between its share price and the value of its underlying assets. Buying back shares below NAV reduces the number of shares outstanding, which can increase NAV per share and potentially narrow the discount if market conditions stabilize.
Related: NAV Collapse Creates Rare Opportunity in Bitcoin Treasurys — 10x Research
NAV compression tests Bitcoin treasury model
Bitcoin treasury companies have come under pressure amid the months-long downturn in digital asset markets, leading to a broad compression in net asset value (NAV) premiums across the sector.
NAV represents the total value of a company’s assets — in this case, primarily Bitcoin holdings — minus liabilities, divided by the number of shares outstanding. For Bitcoin treasury companies, investors often focus on multiple-to-NAV (mNAV), which measures how a company’s market capitalization compares to the value of its underlying Bitcoin per share.
When mNAV is above 1.0, a company’s shares trade at a premium to its net asset value; below 1.0, they trade at a discount. ProCap’s mNAV is currently around 0.24, according to BitcoinTreasuries.NET data.
However, some industry observers question whether mNAV fully captures the value of Bitcoin treasury companies. NYDIG research head Greg Cipolaro has argued that the traditional mNAV framework may be incomplete because it does not account for operating businesses or strategic initiatives beyond simply holding digital assets.