Special purpose acquisition company (SPAC) Columbus Circle Capital (BRR) and ProCap BTC — led by Anthony Pompliano and after raising more than $750 million to build a bitcoin tax firm — closed their merger late Friday.
The combined company has been renamed ProCap Financial and will begin trading on the Nasdaq under the symbol BRR on Monday.
The performance of the rapidly formed bitcoin tax companies (BTCTCs) this year has been disastrous, with most falling 90% or more after their SPAC combinations.
KindlyMD ( NAKA ) and Strive ( ASST ) — to name two of the higher profile ones — now each trade for less than $1.
BRR shares had been trading in a very tight range near their $10 offering price for several months. They even closed at $10.15 on Friday, November 28, perhaps because investors held out in the hope that the merger would not be approved and that Columbus Circle could look for another merger partner or return capital to shareholders.
As the merger completion became apparent this week, BRR fell more than 50% to close yesterday at $4.36.
Pomp tries to address the concerns
Among the issues facing this year’s crop of BTCTCs are the often sweet compensation deals secured by management and boards. After all, why should investors pay so much money for something they can sort of do themselves – buy and hold bitcoin.
After hearing those concerns, Pompliano said earlier this week that he will earn a salary of just $1 a year with no guaranteed bonus. Going forward, he promised that any stock compensation won’t take effect until the stock hits $15 a share, or more than three times its current trading price.
Pompliano also said the board had agreed not to receive any equity compensation until the share price hits certain price targets. As for the preferred investors in the SPAC agreement (the so-called PIPE), they will also need targets to be met.
“CEOs and boards should not make millions of dollars unless retail shareholders also win,” Pompliano said. “Now that I’m in charge of a public company, I hope to set the standard for what true shareholder alignment looks like.”
