Go buy Bitcoin with someone else’s money. Also, news on Metals X partial takeover of Greentech
Royalty Management Holding Company
I sold Royalty Management Holding Corporation this week. I’m booking a gain of ~30% on this position and walking away. Shares started moving once the company became NASDAQ-compliant, which was expected and part of the investment thesis. Then, controlling shareholder American Resource Corporation pumped the value of RMCO with this tweet.
I didn’t love the promotional stuff coming out of the company’s Twitter/X account, like announcing new 52-week highs, but I wanted exposure to their chromatography technology for increasing recoveries of gold/silver/PGMs. It didn’t hurt that they were paying a dividend and buying back shares too.
But then RMCO announced plans to buy Bitcoin, first with their cash flow and eventually issuing new shares to keep going.
RMCO has access to over $50 million in registered securities and other investment mechanisms, enabling it to expand its balance sheet holdings in Bitcoin and other assets at an opportune valuation.
That’s a lot of dilution for $19-million market cap company and the stock dropped on the news. RMCO later clarified they wouldn’t issue shares until RMCO crossed $20, which is jumping the gun. They then started retweeting conspiracy theories about hedge funds shorting the stock. The whole thing is stupid and I’m out. Go buy Bitcoin with someone else’s money.
This is not to say I am against digital asset treasury companies. I am against DATCs when they trade above NAV and use my money to incinerate capital. I will be picking through the wreckage when the crypto cycle turns and these things are all trading at distressed valuations. After all, I made my bones buying my original position in Ether Capital for 40 cents.
Digital asset treasury companies, busted biotechs trading below cash – these are all the same trade.
Metals X
We’re also waiting on Metals X to see if they can actually consolidate ownership of the Renison tin mine. Greentech is recommending Metals X’s partial offer to shareholders. As a reminder, MLX is looking to buy 382.48 million Greentech shares, at HK$0.35. A Greentech subsidiary owns the other 50% of Renison.
