Nasdaq-listed stock plunges 29% after announcing plan to buy Bitcoin

Nasdaq-listed Alpha Modus Holdings (AMOD) shares plunged nearly 29% on Aug. 27 after the artificial intelligence company advanced plans to add 3,170 Bitcoin to its balance sheet through a Bitcoin-funded private placement.

Alpha Modus said the transaction would add more than $200 million in Bitcoin assets, valuing the cryptocurrency at $71,000 per coin. 

The company describes itself as a vertical AI business focused on retail engagement, intellectual property and financial technology.

The scale of the proposed Bitcoin position dwarfs the company itself. Alpha Modus had an intraday market capitalization of about $18.9 million on Thursday as its shares fell to $2.72, down 28.6%.

Under an agreement signed Aug. 26 with non-U.S. investors, Alpha Modus would issue about 51.6 million Class A shares and warrants for another 51.6 million shares in exchange for the 3,170 BTC. 

CEO William Alessi said the company had considered a similar strategy when Bitcoin was near record highs but decided to wait. 

"Today, we have an opportunity to add more than $200 million in Bitcoin assets to our balance sheet," he said, adding that management expects the deal to strengthen shareholder equity and help address a Nasdaq listing deficiency.