- Obscure holding company Nilam Resources announced intent to acquire 24,800 Bitcoin worth $1.7 billion, but details raised questions about legitimacy
- Nilam’s announcement didn’t make sense financially given its reported low market cap and plan to acquire Bitcoin at a discount
- Possible explanation is that Nilam pumped its stock price 990% through the announcement to profit, leading some to believe it’s a scam
A little-known investment holding company has announced its intent to take billions of dollars in Bitcoin (BTC) off the market, but crypto fanatics think the news is too bullish to be true.
Details of the Announcement Raise Questions
Nilam Resources (NILA), a self-described investment holding company focused on frontier technologies, said it signed a letter of intent to acquire 24,800 BTC on Monday. The bold plan follows its acquisition of MindWave, a special-purpose entity from the Mauritas-based connectivity firm Xyberdata.
That’s a Bitcoin buy worth $1.7 billion at today’s prices, carrying a potentially powerful demand shock. But it also raised questions about how the company can afford that sort of purchase given that the self-reported market cap of Nilam Resources is less than $25 million per the company’s website.
The company’s press release says it plans to issue a newly authorized Preferred Class of Series C Stock to acquire the coins at a discounted rate relative to Bitcoin’s current price, up 57% since the start of the year.
For Crypto Twitter, details surrounding the announcement didn’t add up. Why announce the intended purchase before actually acquiring the coins? Why specify the exact number of coins that will be acquired rather than the amount of money spent on them?
Nilam’s Details Appear Hazy
The company’s details seem hazy as well. One version of the site, NILA Holdings, lists an office address in Snohomish, Wash. and says it is an investment holding company, while another unofficial site depicts it as a South American gold miner.
In its press release, Nilam described Bitcoin as “the new Gold Standard” and the “future of digital transactions.” The announcement had been published on the Nasdaq website but has apparently been removed.
Possible Explanations Emerge
Some believe the answer to Nilam’s mystery lies in a look at its OTC-traded stock, NILA, which traded for under $0.02 with a market cap float of $85 million after Monday’s close.
At Tuesday’s open following its Bitcoin acquisition announcement, the stock surged to $0.18 – a 990% climb – while volume for the stock rose to several hundred times its daily average.
