American Bitcoin (NASDAQ:ABTC) has torched $500 million in shareholder value since September while Eric Trump’s personal fortune jumped from $190 million to $280 million, according to a Forbes report published Tuesday.
American Bitcoin Stock Down 92% From Peak
When American Bitcoin hit the Nasdaq on September 3, investors valued the company at $13.2 billion despite holding just $270 million of Bitcoin (CRYPTO: BTC).
The stock is now down 92% from its peak after the company dumped 149 million shares to buy more Bitcoin.
Eric Trump pitched the company as mining Bitcoin for roughly $57,000 per coin when it traded around $116,000.
But the all-in cost including machines, marketing, and capital allocation hit about $92,000 per Bitcoin at the time, leaving slim margins that evaporated when prices fell.
How The Stock Dumping Worked?
American Bitcoin sold 11 million shares for $90 million in the first 27 days, cashing out at an average of $8 per share.
From October to mid-November, the company offloaded 7 million shares for $44 million at roughly $6 per share.
Around late November, it unloaded 47 million shares for $106 million at $2.25 per share. From January 1 to March 25, the company sold 84 million shares for $111 million.
The company spent an estimated $525 million from its founding to late March on crypto now worth $390 million, erasing $135 million in shareholder value.
The Hidden $330 Million Liability
American Bitcoin bought a $330 million fleet upgrade in August and September without paying cash upfront.
Instead, the company pledged Bitcoin and secured an option. If prices rebound, American Bitcoin pays $330 million cash and keeps the pledged Bitcoin. If prices stay low, it hands over the crypto.
Bitcoin has dropped 30% since the purchase. The company pledged 3,090 Bitcoin as of March 25 but has only mined an estimated 1,800 Bitcoin.
If prices don’t rebound, every Bitcoin the company mined gets wiped out when options expire around August 2027.
American Bitcoin’s Real Business Model
About 70% of American Bitcoin’s crypto doesn’t come from mining but from selling stock and buying Bitcoin on the open market.
The company has just two full-time employees according to an annual report. Hut 8 retains the real estate, runs the data centers, and handles back-office functions while the Trumps focus on salesmanship.
With Bitcoin down 31% since launch, the all-in mining cost still stands at $90,000 per Bitcoin, about $13,000 more than Bitcoin is currently worth. Meanwhile shares are down 29% year-to-date.
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