Special purpose acquisition company (SPAC) Columbus Circle Capital (BRR) and ProCap BTC, led by Anthony Pompliano and which has raised more than $750 million to build a bitcoin treasury company, closed their merger late Friday.
The combined company was renamed ProCap Financial and will begin trading on the Nasdaq under the symbol BRR on Monday.
The performance of hastily formed bitcoin treasury companies (BTCTC) this year has been disastrous, with most falling 90% or more after their SPAC combinations.
KindlyMD (NAKA) and Strive (ASST), to name two of the most notable, now each trade for less than $1.
BRR stock had been trading in a very tight range near its $10 offering price for several months. They even closed at $10.15 on Friday, November 28, perhaps because investors were hopeful that the merger would not be approved and Columbus Circle could find another merger partner or return capital to shareholders.
As the completion of the merger became clear this week, BRR plummeted more than 50%, closing yesterday at $4.36.
Pomp tries to address concerns
Among the issues facing this year’s BTCTC crop are the often good compensation deals obtained by management and boards of directors. After all, why should investors pay so much money for something they can do themselves: buy and hold bitcoins?
Surely hearing those concerns, Pompliano said earlier this week that he will earn a salary of just $1 per year with no guaranteed bonus. Going further, he promised that any stock compensation will not be applied until the stock reaches $15 per share, or more than three times its current trading price.
Pompliano also said the board had agreed not to receive any stock compensation until the stock price reaches certain price targets. As for the preferred investors in the SPAC deal (the so-called PIPE), they will also need targets to be met.
“CEOs and boards of directors should not be making millions of dollars unless retail shareholders are also making money,” Pompliano said. “Now that I’m running a public company, I hope to set the standard for what true shareholder alignment looks like.”
