Special purpose acquisition company (SPAC) Columbus Circle Capital (BRR) and ProCap BTC – led by Anthony Pompliano and having raised more than $750 million to create a Bitcoin treasury company – closed their merger Friday evening.
The combined company has been renamed ProCap Financial and will begin trading on Nasdaq on Monday under the symbol BRR.
The performance of hastily created Bitcoin Treasury (BTCTC) companies this year has been disastrous, with most falling 90% or more following their SPAC combinations.
KindlyMD (NAKA) and Strive (ASST) – to name two of the most high-profile – now each trade for less than $1.
BRR shares had been trading in a very tight range, close to their $10 offering price, for several months. They even closed at $10.15 on Friday, November 28, perhaps because investors were hoping that the merger would not be approved and that Columbus Circle might seek another merger partner or return capital to shareholders.
As the completion of the merger became evident this week, the BRR plunged more than 50%, closing yesterday at $4.36.
Pomp attempts to address concerns
Among the issues facing this year’s BTCTCs are the often advantageous compensation deals made by management and boards. After all, why should investors pay so much money for something they can do themselves: buy and hold bitcoins.
Surely having heard those concerns, Pompliano said earlier this week that he would earn a salary of just $1 a year with no guaranteed bonus. Going further, he promised that no stock compensation would take effect until the stock reached $15 per share, more than three times its current stock price.
Pompliano also said the board agreed not to receive any stock compensation until the stock price reaches certain price targets. As for the preferred investors in the SPAC deal (called PIPE), they too will need targets to achieve.
“CEOs and boards of directors should not make millions of dollars unless individual shareholders win as well,” Pompliano said. “Now that I am leading a public company, I hope to set the standard for true shareholder alignment.”
