Zhibao, a Nasdaq-listed insurance-tech company based in Shanghai, said it plans to raise $220 million through a direct stock offering and use the proceeds to buy bitcoin for its corporate treasury. The company's shares currently trade below $1, putting it at risk of delisting under Nasdaq's minimum bid price rule.
The stock sale details
Zhibao will sell newly issued shares directly to investors, bypassing the traditional underwriting process. The company did not disclose the exact number of shares or the discount at which they will be offered. Proceeds from the sale are earmarked exclusively for bitcoin purchases, according to the announcement.
Why bitcoin?
The move follows a playbook popularized by MicroStrategy and other firms that have converted corporate cash reserves into bitcoin as a hedge against inflation and a store of value. Zhibao, which provides insurance technology services in China, did not elaborate on its rationale beyond the plan to hold bitcoin as a treasury asset.
The compliance angle
Zhibao's Nasdaq listing subjects it to U.S. securities laws and exchange rules. The company will need to disclose its bitcoin holdings in quarterly filings and may face questions from auditors about valuation and custody. The offering itself must comply with SEC registration requirements, though direct offerings typically face fewer hurdles than public offerings.
Zhibao has not set a timeline for the stock sale or the subsequent bitcoin purchases. The company's stock price, which has languished below $1 for months, could see volatility as the market digests the plan. If the offering succeeds, Zhibao would join a small but growing list of publicly traded companies with bitcoin on their balance sheets.
