Osprey Bitcoin Trust considers sale or merger options amidst talks of deregistration due to trading at a discount. CEO Greg King shares insights on tender proposal and seeks alternatives. Lawsuit against Grayscale highlighted.
The Osprey Bitcoin Trust made an announcement on March 5 regarding its potential sale or merger. Should discussions fail to yield results, the trust will proceed with deregistration and liquidation within 180 days.
Recognizing the disparity between fractional units of the BTC trust and the actual value of Bitcoin (BTC), Osprey is exploring various avenues to optimize shareholder value. The disclosure prompted a notable surge in the unit price. Closing at $15.98 on March 4, the unit saw a rise to $20.68 on March 5, eventually settling at $19.17 at the time of this writing.
Greg King, the founder and CEO of Osprey, shared the company's initiatives for financial prosperity on X (formerly Twitter). The company submitted Form 8-K to the United States Securities and Exchange Commission (SEC) on Jan. 11, signaling its intention to conduct a tender offer for the purchase of 20% of its units at net asset value, minus taxes and fees. King stated:
"To clarify, the 'tender offer' is essentially a redemption program. It is filed as a 'tender offer' due to US regulations. Any eligible $OBTC shareholder who adheres to the guidelines will receive NAV less the fee upon conclusion of the tender."
However, the tender proposal did not elicit the desired response, as expressed by King on X on Feb. 9:
"Hey everyone, we were disappointed with the responses we received regarding the tender. It's baffling to us. Unfortunately, this seems to be the norm in Washington these days..."
While King did not delve into specifics regarding the responses, he mentioned that Osprey is exploring alternative solutions.
Upon its launch in January 2021, Osprey emerged as a competitor to the larger Grayscale with its over-the-counter BTC trust. It provided accredited investors with BTC exposure within brokerage accounts. However, the trust faced significant challenges during the crypto winter and, by January 2023, had laid off a majority of its employees.
In January 2023, Osprey filed a lawsuit against Grayscale, alleging, "Only because of its false and misleading advertising and promotion has Grayscale been able to maintain to date approximately 99.5% market share in a two-participant market."
In addition to its BTC trust, Osprey also offers over-the-counter Polkadot (DOT) and Solana (SOL) trusts, as well as a private placement BNB Chain Trust (BNB).