Since bitcoin (BTC) treasury company mania peaked on May 12, David Bailey’s Nakamoto (NAKA) has been at the forefront the industry’s subsequent decline.
The drop from $28.50 per share to yesterday’s close at $0.96, represents a 96% loss for shareholders since the opening bell of David Bailey’s deal.
Widely credited with encouraging Donald Trump to reverse his anti-bitcoin stance and securing his keynote speech at the world’s largest bitcoin conference, Bailey has championed other Trump initiatives like his oddly named US Strategic Bitcoin Reserve that has purchased 0 BTC to date.
During Trump’s election and early weeks in office, Bailey also shared lofty predictions about Nakamoto, his own public company.
Shares of KDLY, which soon changed ticker symbol to NAKA, opened for trading on May 12 at a breathtaking 1,000% premium to KDLY’s price one week prior.
Bailey billed Nakamoto as a treasury company of treasury companies, a meta-play on an ostensibly ingenious scheme devised by a new class of Bitcoiners: Suitcoiners.
Suitcoiners like Bailey would convince Wall Street to finance a global fleet of BTC treasury companies that would steadily gobble up the limited, 21 million supply of BTC.
As long as BTC rallied parabolically, everything would work out.
It didn’t.
What actually happened is that untold numbers of retail investors bought overvalued stocks in the first half of the year that crashed in value in the second half of the year.
BTC has rallied 18% since May 12, modestly and linearly. NAKA, meanwhile, declined 96%. Even the industry’s leader, Michael Saylor’s Strategy (MSTR), has underperformed BTC.
Bailey’s imaginary $1 million BTC floor
In Bailey’s mind, the “floor” or lowest price for BTC is $1 million. Unfortunately, that type of wishful thinking is at the heart of his terrible forecasting abilities.
Bailey’s bullish predictions for both BTC and his treasury company have led to spectacular disappointment, offering a cautionary tale about the gap between crypto rhetoric and market reality.
Despite his belief, $1 million is less a floor and more a cavernous ceiling that BTC has never remotely approached. Even at its all-time high near $126,000, Bailey’s predicted “floor” lofted 700% higher.
Read more: Most new BTC treasury stocks down at least 50% this year
The treasury company of treasury companies is down 97.2%
The real test of Bailey’s judgment arrived with Nakamoto’s catastrophic performance. On May 12, the company’s multiple-to-net asset value (mNAV) peaked above 23x.
Fast forward to today, and its mNAV is below 0.93x.
Bailey later admitted the obvious, saying, “The market is heavily betting against us.” Of course, that admission arrived only after retail investors had already suffered massive losses.
Moreover, he ignored that he himself had created that market by selling shares to PIPE investors at $1.12 per NAKA share — on the same day that shares opened for retail trading at $28.50.
Throughout a grinding months-long downtrend, Bailey has desperately tried to maintain optimism. “We’ll get through this as quickly as possible,” he implored.
“What’s critical is building an aligned shareholder base.”
Unlike Bailey’s social media activity, the company’s stock charts the truth. NAKA currently trades 97.2% below its all-time high of $34.77.
Trading within a couple pennies of its absolute low since his May 12 deal at yesterday’s close of trading, essentially everyone who bought his stock — including privileged PIPE investors — has suffered a financial loss.