Deep Shenzhen-based clothing manufacturer Addentax Group Corp. (ATXG) has announced a new non-binding agreement to purchase a total of 12,000 Bitcoin, and has revised its 8,000 BTC purchase plan announced in May.
This potential acquisition is worth around $1.3 billion at its current price.
The company said in a statement today that the acquisition will be funded through the sale of ATXG shares traded on NASDAQ. However, details of the plan remain unknown. Addentax said the final agreement will be subject to signing, completing a comprehensive due diligence process and obtaining the required approval.
Addentax explained that “this specification sets out a preliminary framework for a planned acquisition and is not a binding agreement.” The company explained that important details such as the number of BTC purchased, the number of shares issued, and stock pricing have not yet been determined. Nevertheless, management intends to allocate key resources to its long-term Bitcoin investment strategy.
However, according to Google Finance data, Addentax’s market value is below $7 million as of today. The company’s plan to make crypto investments of this scale has raised doubts among investors, with its shares being less than a dollar for more than a year. Experts point to the potential risks of stock dilution and volatility.
The company’s past Crypto Ventures is also attracting attention. In May, the company announced it had held acquisition talks worth around $800 million with an “influential” crypto representative, including a MemeCoin investor named Trump, but said there was no binding agreement at the time.
Addentax, a textile company, is one of the latest companies to join the ranks of companies that plan to create cryptocurrency reserves. However, some observers argue that such statements can be used to increase the company’s shares. The 2017 Long Island Ice Tea Company was renamed Long Blockchain Corporation, and the stock price explosion is one of the most memorable examples of this.
*This is not investment advice.
