Bitdeer's $BTDR Stock Lock-Up Expiry Raises Questions Over The Company's Potential Undervaluation
In the past month, Bitcoin-mining company Bitdeer Technologies stock has plummeted approximately 70%, taking the stock from a price of $9.84 a share to a low (as of this writing) of $3.03 a share.
Advocates of the company argue that the price drop is not due to fundamental reasons but rather due to the end of the stock’s lock-up period. Following a company's initial public offering, some of its shares may undergo a ‘lock-up period,’ during which investors are restrained from selling shares for a set period of time.
According to SEC filings, approximately 95% of Bitdeer’s shares had been subject to a lock-up agreement and were unable to trade on the open market.
Advocates of the company argue that the price drop is not due to fundamental reasons but rather due to the end of the stock’s lock-up period. Following a company's initial public offering, some of its shares may undergo a ‘lock-up period,’ during which investors are restrained from selling shares for a set period of time.
According to SEC filings, approximately 95% of Bitdeer’s shares had been subject to a lock-up agreement and were unable to trade on the open market.
Transcript
00:00 In the past month, Bitcoin mining company Bitdeer Technologies has plummeted approximately
00:05 70%, taking the stock from a price of $9.84 a share to $3.03 a share. Advocates of the
00:11 company argued that the price drop is not due to fundamental reasons, but rather due
00:14 to the end of the stock's lockup period. Following a company's initial public offering,
00:19 some of its shares may undergo a lockup period during which investors are restrained from
00:22 selling shares for a set period of time. According to SEC filings, approximately 95% of Bitdeer's
00:28 shares had been subject to a lockup agreement and were unable to trade on the open market.
00:33 The lockup severely reduced the number of shares open for trading, what's called the
00:36 "float", making it difficult for traders to find sufficient liquidity for trading.
00:40 According to page 25 of the SEC filing, the lockup period occurred for a period of 180
00:44 days since the merger, meaning that October 10th was officially the last lockup day period.
00:49 Bitdeer's advocates claim that while holding similar or better revenue, EBITDA, and total
00:52 hash rates than its peers, Bitdeer's stock price has deteriorated far more than its competitors,
00:57 which might suggest the lockup expiration is the main driver of recent price movement.
01:01 These arguments have been used to grant Bitdeer an undervalued designation by its advocates,
01:05 a sentiment that H.C. Wainwright has echoed. H.C. Wainwright recently covered Bitdeer and
01:09 called the company under the radar with compelling growth prospects. H.C. Wainwright issued a
01:14 $20 price target, which could yield nearly 7x returns based on the current share price.
01:18 Speaking on the end of the lockup period, a Bitdeer spokesperson said, "In the past,
01:22 one of the biggest concerns we got from potential investors was the lack of float and tradable
01:26 shares. Now that the lockup expiration has increased our float and liquidity substantially,
01:31 our impediment to attracting new long-term investors has been removed. Although in the
01:34 near term increased turnover inevitably leads to stock price volatility, we believe such
01:39 volatility is merely a reflection of technical issues as a result of temporary market dislocation.
01:44 Our business fundamentals remain solid as demonstrated in our recently published operations
01:48 update. In addition, as our management team openly, actively, and regularly communicate
01:52 with analysts and investors, we are confident that our strong business fundamentals will
01:56 eventually manifest in our stock performance once the near-term market dislocation dissipates."
02:01 (upbeat music)