‘Theater of the Absurd:’ How a flailing Nakamoto bought two companies owned by its same founder

Amid the unfettered frenzy of last year’s Bitcoin treasury trade, David Bailey managed to raise $710 million to build what he called a Bitcoin treasury dynasty.

Nine months and one implosion later, he’s using the carapace of that company to buy two other businesses — from himself.

Nakamoto Inc., the publicly traded Bitcoin treasury company that Bailey founded in 2025, announced on Monday it will acquire BTC Inc — which owns Bitcoin Magazine and runs the Bitcoin Conference — along with UTXO Management, a Bitcoin-focused hedge fund.

The deal has raised eyebrows, especially because Bailey founded the companies being sold and chairs the company buying them.

Existing Nakamoto shareholders will see their ownership diluted by 363.6 million newly issued shares — roughly doubling the outstanding share count.

That’s because Nakamoto will issue that amount of new stock to acquire the two companies, with shares valued at $1.12 each based on an agreement that shareholders approved in 2025, before the stock collapsed.

At $1.12 per share, the deal is worth $407 million on paper. But Nakamoto’s stock closed at $0.29 on Wednesday, meaning those same 363.6 million shares were actually worth just $107 million at the time of announcement.

The stock fell even further in the days following the announcement. On Friday afternoon, it was trading at $0.24.

This isn’t Bailey’s first rodeo destroying shareholder value. Last year, Nakamoto plunged 96% when PIPE shares unlocked, prompting Bailey to tell shareholders who “came looking for a trade” to exit their positions.

A PIPE, or Private Investment in Public Equity, allows select investors to buy shares at a fixed price before the stock trades publicly, typically at a discount to market price.

Now, five months later, he’s using the same collapsed stock to buy his own companies.

Nakamoto and David Bailey did not immediately reply to a request for comment from DL News.

The acquisition

Bailey also appeared to overstate the health of his own newly-acquired companies.

Just one day after the announcement, Bailey appeared on an X space hosted by Bitcoin Magazine, where he told investors that BTC Inc and UTXO management had done “over $100 million in revenue” in 2025.

But on Wednesday, Nakamoto filed an 8-K with the SEC correcting its chairman. The actual number was $78 million.

One man who has been following the treasury trade closely — and with suspicion — is renowned short seller Jim Chanos. He actively shorted Strategy’s premium, and has been an avid contrarian to the trade.

Chanos didn’t shy away from commenting about Bailey’s latest deal: “Theater of the Absurd,” he said.

Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him [e-mail].