Bitcoin Backdoor: Could MGT Capital Investments Move Into The Same Class of Investments As GBTC?
MGT Capital Investments (Ticker Symbol MGTI) is missing out on a fantastic opportunity. I wrote John McAfree and board members this quick memo:
Currently, there is only one exchange-traded fund in the U.S. for investing in Bitcoin. That is GBTC. Shareholders who hold 10-11 shares of GBTC hold the equivalent leverage of one bitcoin. However, as the only fund available to U.S. investors in the U.S. this fund has acted like a futures contract anticipating new highs - at times trading nearly 100% premium to the underlying Bitcoin. When Bitcoin hit 5,000 GBTC hit 1,000 per share.
But there is another company out there that could leverage this same advantage almost overnight- MGT Capital Investments. Unfortunately, the history of MGT Capital Investments stock includes a big reverse split which is a big red flag for investors.
However, in the case of MGTI the reverse stock split was prior to the change in business direction and there are a few examples of directors who used this to turn around a failing company - That requires a commitment to a "One and done" policy. I suspect this will be the case with EXCO as it seeks to recover a previously good business model prior to the downturn in oil prices.
Recently, I wrote John McAfree and some managers and board members at MGT Capital Investments with this request:
"How about making MGTI the next GBTC without all the regulation hassles? Lockdown a percentage of the mined Bitcoin to MGTI stock. Keep the stock float low - Take advantage of bitcoin volatility buying the stock low and selling back high like we do with GBTC."
Regulations have put the breaks on further exchange-traded funds for bitcoin and prevented GBTC from moving up onto NASDAQ from its current OTC listing.
As we can see from the multiplication of outstanding shares followed by reverse stock splits the potential to fleece investors - legally - is rampant in the stock market and practically a regular practice in OTC stocks. You need to look no further than DRYS or TOPS to find examples of massive increases in outstanding shares followed by reverse splits and the ensuring class action lawsuits.
But so what? Let the legit companies separate themselves from the pack by contractually guaranteeing their integrity and locking down the number of shares or tying them to a set number of bitcoin or altcoins of substance.
You know, limiting supply - like Bitcoin does and the U.S. mint does not.
John Corrigan
Director of Sales and Marketing
https://www.linkedin.com/in/johncorriganmanufacturing/
HMI Keypad Solution's quick turn capability manufacturing offers the latest in prototyping including CNC precision machining, SLA Stereo Lithography, RTV Vacuum Casting, RIM Reaction Injection Molding with multiple post-production choices like polishing, powder coating, laser etching, texturing, pad printing, anodizing & electroplating, brush aluminium and mirror finishing.