Shares in the livestreaming and e-commerce company GD Culture Group fell 28% on Tuesday after announcing a share deal to acquire all the assets from Pallas Capital Holding, including 7,500 Bitcoin.
GD Culture will issue nearly 39.2 million shares of its common stock in exchange for all Pallas Capital’s assets, including $875.4 million worth of Bitcoin (BTC), the firm said on Tuesday. The deal was made last Wednesday.
GD Culture’s CEO and chairman, Xiaojian Wang, said the deal would “directly support” its plan to build a “strong and diversified crypto asset reserve” while benefiting from Bitcoin’s growing institutional acceptance as a reserve asset and store of value.
The company uses artificial intelligence to create fake people and runs a livestreaming and e-commerce business via TikTok. Its acquisition would make it the 14th largest publicly listed Bitcoin holder, joining a trend of firms that are buying up cryptocurrency.
So-called Bitcoin treasury companies have surged in 2025, with more than 190 publicly listed companies now holding the asset, up from fewer than 100 at the start of the year. The market has grown to $112.8 billion, dominated by Michael Saylor’s Strategy with a 68% share.
However, momentum has waned recently, as some investors worry that the strategy of raising capital, converting it into Bitcoin, and waiting for appreciation may not be sustainable.
GD Culture stock tanks
Shares in GD Culture Group (GDC) fell 28.16% on Tuesday to $6.99, Google Finance data shows. Shares recovered slightly in after-hours trading, rising 3.7%.
It marked GDC’s largest fall in over 12 months, sinking its market cap to $117.4 million. Shares in the company are now 97% off its all-time high of $235.8 set on Feb. 19, 2021.
Diluting company shares often triggers negative market reactions as it reduces ownership percentage among existing shareholders.
VanEck warned on June 16 that companies financing Bitcoin purchases through stock issuance or debt may face capital erosion if their stock prices fall, as the value of their Bitcoin holdings may not be enough to support new investments without harming existing shareholders.
“As some of these companies raise capital through large at-the-market (ATM) programs to buy BTC, a risk is emerging: If the stock trades at or near NAV [net asset value], continued equity issuance can dilute rather than create value,” said VanEck’s head of digital assets research, Matthew Sigel, at the time.
GD Culture set sights on Bitcoin, Trump memecoin in May
GD Culture announced its crypto treasury strategy in May, when it said it planned to sell up to $300 million of its common stock to invest in crypto, including Bitcoin and President Donald Trump’s Official Trump (TRUMP) token.
The stock offering was announced over a month after the firm received a noncompliance warning from Nasdaq related to its stockholder equity being below the minimum requirement of $2.5 million.