Brazilian company Méliuz shares traded 7% lower at R$8.20 on May 30 amid the company’s announcement of a primary share sale that could raise roughly $26 million to expand its Bitcoin (BTC) treasury.

The cashback and financial services firm filed to issue 17,006,803 new ordinary shares through Brazil’s fast-track “automatic” registration channel for professional investors. 

In addition to the $26 million offering from the base deal, management can expand the offer by up to 200% if books show stronger demand, but it did not activate that option at launch. 

Pricing will follow a book-building process that sets a single clearing price for all participants, including retail holders exercising priority rights.

Transition to Bitcoin treasury

CEO Israel Salmen framed the transaction as structural, saying proceeds will “optimize the balance sheet” and align with the board’s March decision to park 10% of cash in Bitcoin. 

He did not disclose a specific purchase schedule. Still, the structure of selling equity and moving reserves into Bitcoin tracks the method adopted by Strategy, which has repeatedly tapped capital markets to expand its digital-asset position.

Méliuz disclosed on March 6 that it had purchased 45.72 BTC for $4.1 million at an average of $90,296 per coin, making it the first Brazilian public company to adopt the BTC treasury strategy.

At the time, Salmen said Bitcoin was “a long-term store of value” and management had no intention of trading the position.

Investors accelerated into the stock after the announcement. Méliuz shares have climbed 113% from March 6 to the current price, outpacing Brazil’s Ibovespa benchmark and mirroring Bitcoin’s move to record highs above $110,000.

Next steps

Salmen said the company will convene an extraordinary shareholders’ meeting to increase its authorized capital, allowing it to honor warrant exercises without delay. 

He added that the board intends to maintain the current dividend policy and sees the Bitcoin allocation as complementary rather than disruptive to core operations.

Méliuz ended the first quarter with nearly $263 million in gross cash and financial investments. A 10% Bitcoin threshold implies further purchases if the company maintains that policy after closing the new equity sale.

Mentioned in this article

Méliuz, a publicly traded Brazilian company, has announced the acquisition of Bitcoin (BTC) equivalent to 10% of its cash holdings, local media reported on AMarch 6.

The company purchased 45.72 BTC for $4.1 million at an average price of $90,296 per BTC. The purchase makes Méliuz the first publicly listed Brazilian firm to hold a significant Bitcoin position as part of its treasury strategy. 

Israel Salmen, chairman and largest shareholder of Méliuz, said that the company sees Bitcoin as a more effective alternative for capital allocation.

He said:

“We see Bitcoin as a long-term store of value. We have no intention of selling the BTC we’ve acquired. We are not traders. We want to build long-term value.”

Salmen acknowledged that increasing exposure to Bitcoin introduces risk but emphasized that Méliuz has consistently been willing to take calculated risks since its founding in 2011.

Méliuz chairman also compared Bitcoin to traditional asset allocation strategies, arguing that holding excess capital in fixed-income instruments may seem prudent but results in a significant opportunity cost.

He added:

“Many see Bitcoin as a high-risk asset. But do we truly understand the concept of risk? What is riskier—holding cash reserves subject to devaluation due to aggressive monetary expansion policies or investing in a truly scarce asset that has appreciated 77% per year in dollars over the past decade and has a market capitalization of approximately $1.5 trillion?”

Following Strategy’s model

Méliuz’s Bitcoin investment strategy draws direct inspiration from Strategy. It cited the success of the company led by Michael Saylor following the addition of BTC to its treasury, with the company’s shares soaring 423% last year.

Méliuz’s move toward Bitcoin comes amid declining investor interest in its stock. The company, which reached a peak valuation of R$6 billion (over $1 billion) in mid-2021, saw its stock trade with daily volumes averaging $43.3 million at the time.

Méliuz is valued at nearly $47 million today, with less than $700,000 in daily trading volume and minimal analyst coverage. In a letter to shareholders, Salmen acknowledged this decline, noting that the company’s stock has lost market relevance.

Mentioned in this article