Marlton Partners, a private investment company from Chicago, has urged Grayscale Investments to accept the revised GBTC stock auction offer from the Netherlands. According to Marton, such tender offers “substantially reduce the NAV discount-if not eliminated.” In turn, this gives shareholders “confidence in the sponsor’s ability to manage fund discounts.” .
Billions of dollars in value loss
Although GBTC has a competitive advantage as the world’s largest Bitcoin fund, GBTC’s stock price is still trading at a “significant discount to its net asset value.” According to Marlton Partners, this net asset value discount “currently causes more than $3.1 billion in value loss to trust shareholders.”
At the same time, in an open letter to Grayscale Investment Management, the managing director of Marlton Partners James C. Elbauer insisted that the current efforts to eliminate discounts have proven to be inadequate . In support of this view, Elbaor pointed to the recently announced plan of Digital Currency Group (DCG) to purchase $250 million worth of GBTC stock. Elbauer said in the letter:
As you acknowledged in the press release announcing the transaction, this is helpful, however, this operation does not mean that DCG is obliged to acquire any specific number of shares at any time, and it can be modified or suspended at any time. Without notice.
Elbaor believes that the market’s response to DCG’s announcement has proved that such authorized purchases are invalid. At the time of writing, the discount on GBTC shares has been expanded to 11.45%.
Revised Dutch auction tender
At the same time, Elbaor claimed that Marlton’s tender offer system enabled “shareholders to sell their shares at a specified price.” He said that this could “be higher than the market price within a specific time frame. The offer price is completed and depends on the minimum or maximum number of shares sold.”
Furthermore, the executive director told Grayscale, “The development of a clear capital allocation plan through GBTC’s tender offer will enable you and GBTC to become the only digital currency asset managers, thereby creating shareholder value, whose value should exceed individual digital currency exposure 2% of that.”
At the same time, Elbaor said that although he hopes the dialogue with Grayscale will be fruitful, he insists that Marlton Partners “reserves all the rights to take further action to protect our and other shareholders’ investments.”
Do you agree that the auction offer system will eliminate discounts on GBTC shares? Tell us what you think in the comments section below.
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