As bitcoin, ethereum and other cryptocurrencies get increasing attention from investors, Wall Street and its traditional banks continue to adjust to the shift. Catch up on this week's top stories highlighting the intersection of these old guard and new school areas of finance with this recap compiled by The Fly.
CIRCLE TO GO PUBLIC: Circle (CRCL) announced Thursday that it has entered into a definitive business combination agreement with Concord Acquisition (CND), a publicly traded special purpose acquisition company. Under the terms of the agreement, a new Irish holding company will acquire both Concord and Circle and become a publicly-traded company, expected to trade on the NYSE under the symbol "CRCL". The transaction values Circle at an enterprise value of $4.5B. Jeremy Allaire, Circle's co-founder and CEO commented "Circle was founded with a mission to transform the global economic system through the power of digital currencies and the open internet. We've made huge strides towards realizing this vision, and through this strategic transaction and ultimate public debut, we are taking an even bigger step forward, with the capital and relationships needed to build a global-scale internet financial services company that can help businesses everywhere to connect into a more open, inclusive and effective global economic system. We are thrilled to partner with Concord's executive and investment team, drawing on their decades of operating experience growing financial services businesses around the world."
The business combination is supported by $415M of capital commitments at $10.00 per share. Including the contribution of up to $276M of cash held in Concord Acquisition Corp's trust account, the transaction is expected to deliver up to $691M of gross proceeds to the combined company. Upon consummation of the transaction, existing Circle shareholders will maintain approximately 86% ownership interest in the combined company. The transaction, which has been unanimously approved by the board of directors of both Concord Acquisition Corp and Circle, and is expected to close in the fourth quarter of 2021.
SQUARE WORKS ON BITCOIN WALLET: Square (SQ) CEO Jack Dorsey confirmed via Twitter Thursday that the company is building a hardware wallet and service to make bitcoin custody "more mainstream”. The CEO said, “We’re doing it #Bitcoin” on a retweet of an earlier post by Square hardware lead Jesse Dorogusker. The post read, “We have decided to build a hardware wallet and service to make bitcoin custody more mainstream. We’ll continue to ask and answer questions in the open. This community’s response to our thread about this project has been awesome - encouraging, generous, collaborative, & inspiring.”
On Friday, DA Davidson analyst Christopher Brendler kept his Buy rating and $275 price target on Square, stating that while the stock is increasingly trading with Bitcoin, there is "so much more" to its investment story. The analyst notes that he is bullish heading into Q2 results despite the deceleration in the company's Cash App business. Brendler believes that Square can outperform even if Bitcoin continues to slide. The analyst recommends that investors use an BTC-related weakness as a "buying opportunity".
BULLISH TO GO PUBLIC VIA MERGER: Bullish announced Friday it intends to go public on the New York Stock Exchange through a merger with Far Peak Acquisition (FPAC). Bullish is preparing to release a regulated cryptocurrency exchange that offers liquidity with technology that enables retail and institutional investors to generate yield from their digital assets. The business combination of Bullish and Far Peak has a pro forma equity value at signing of approximately $9B at $10 per share, to be adjusted at transaction closing based on crypto asset prices around that time. The proceeds include net cash in trust of approximately $600M and $300M of committed private investment in public equity, or PIPE. The transaction is expected to close by the end of 2021 and is subject to approval by Far Peak stockholders and other customary closing conditions, including regulatory approvals. The boards of directors of both Bullish and Far Peak have unanimously approved the proposed transaction. In the coming weeks, Bullish exchange will run a private pilot program leading up to its public launch anticipated later in 2021. In the pilot program, participants will be able to test and experience the platform first-hand within a simulated market environment, testing out Bullish exchange's proprietary innovations, including the Bullish Hybrid Order Book and Liquidity Pools.
VOYAGER DIGITAL INITIATED WITH BUY: BTIG analyst Mark Palmer initiated coverage of Voyager Digital (VYGVF) on Thursday with a Buy rating and C$36 price target. Voyager, as the only fully regulated, crypto-only brokerage in the U.S., is poised to continue the "rapid growth" in trading volumes, revenues, profit, and operating cash flow it has generated during the past several quarters, Palmer said.
CRYPTO STOCK PLAYS: Cryptocurrency revenues have been pointed to as reasons to be bullish on Advanced Micro Devices (AMD) and Nvidia (NVDA) in select research. Overstock (OSTK), Ideanomics (IDEX), Riot Blockchain (RIOT), Pareteum (TEUM) and SRAX (SRAX) are other stocks that have been touted, or promoted themselves, as a way to play the crypto theme.
PRICE ACTION: As of time of writing, bitcoin drop slightly this week to $33,402 in U.S. dollars, according to TradeBlock.
Bitcoin
+
Bitcoin
+
Bitcoin
+
Ethereum
+
Dogecoin
+
Litecoin
+
Circle
+
Concord Acquisition
+0.06 (+0.57%)
Block
+2.2 (+0.93%)
Far Peak Acquisition
+0.35 (+3.52%)
Visa
+1.135 (+0.48%)
Coinbase
+0.93 (+0.38%)
Voyager Digital
-0.73 (-4.53%)
AMD
+0.06 (+0.07%)
Nvidia
+4.49 (+0.56%)
OSTK
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Ideanomics
+0.005 (+0.19%)
Riot Platforms
+0.42 (+1.24%)
Pareteum
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Srax
-0.005 (-0.11%)