More corporations that have entered the domestic stock market through the technology special listing system are expanding their business into the virtual asset TREASURE sector. As businesses utilizing their technology have struggled to translate into actual performance, experiencing liquidity crises or ultimately failing to meet listing maintenance requirements, this attempt to pivot is seen as a remedy for such situations. Growing interest from investors in virtual assets has also made the TREASURE business a means of propping up struggling stock prices.
Concerns have arisen in some quarters. The technology special listing system opens a funding channel through listing by recognizing the excellence of technology even if there are no immediate results. However, there are concerns that if listed companies that entered the stock market through this route focus on accumulating virtual assets instead of developing recognized technologies, the essence of the technology special listing system will inevitably be undermined. There are also indications that virtual asset companies could use the technology special listed companies as a backdoor listing channel.
According to the financial investment industry on the 25th, Bridge Biotherapeutics and Bitmax are each pursuing Bitcoin TREASURE business in addition to their core businesses of new drug development and extended reality (XR) technology development. Bitcoin TREASURE refers to a corporation holding a portion of its reserves in the cryptocurrency Bitcoin.
A notable example of a company that bought about 500,000 Bitcoins and saw its stock price soar is the Nasdaq-listed STRATEGY.
The common point of Bridge Biotherapeutics and Bitmax is that they were listed under the technology special listing but have not produced results for a long time. The Bitcoin TREASURE business they utilized as a means to overcome this crisis has also become a focus.
In the case of Bridge Biotherapeutics, as of last March, the loss before corporate tax expense exceeded 50% of its equity, leading to its designation as a management item. A technology special listing company that has applied for a loss exception for a certain period (3 years) will face delisting risk if its loss ratio exceeds 50% more than twice within 3 years. Their revenue was only 2.17 million won last year.
However, the situation changed on the 20th when the U.S. cryptocurrency hedge fund Parataxis Holdings acquired control of Bridge Biotherapeutics. Parataxis plans to invest a total of 25 billion won in Bridge Biotherapeutics, including participating in a paid-in capital increase of 20 billion won and allocating 5 billion won in convertible bonds (CB). Immediate capital increases will bring the loss ratio below 50%.
Having escaped the delisting crisis, Bridge Biotherapeutics decided to expand its main business into a Bitcoin TREASURE platform. On the 20th, prior to this news breaking, Bridge Biotherapeutics' stock rose over 20%, and after the announcement on the 23rd, it hit the upper limit.
Bitmax (formerly MAXST) has also performed poorly every year since its technology special listing in 2021. The XR market, which was rapidly expanding due to the COVID-19 pandemic, has entered a downturn since the end of the pandemic, and its performance has deteriorated. As of the end of last year, the cumulative operating loss was 14 billion won, with its stock price dropping to one-twentieth of what it was at the time of listing.
After being acquired by a meta-platform investment fund in January, Bitmax has ventured into the TREASURE business. It is buying Bitcoin through large-scale fundraising, and it is known that Bitmax has secured over 250 Bitcoins so far. Consequently, its stock price surged more than sevenfold, from around 1,000 won last month to 7,110 won based on the closing price on the 20th.
The investment industry is paying attention to the expansion of the Bitcoin TREASURE business as a means for technology special listed companies facing delisting crises to relatively easily turn the situation around. An anonymous accountant noted, "The issue of loss before corporate tax is difficult to solve simply by increasing sales; the only method is to enhance capital. By purchasing virtual assets and offsetting them against inventories and intangible assets, it is effective for securing capital."
However, there are growing concerns that if some corporations intentionally promote their virtual currency businesses, such as Bitcoin, to prop up stock prices, it could lead to investor harm. The government is effectively banning corporate investments in virtual assets due to concerns over such side effects. Currently, corporate accounts cannot be opened at domestic exchanges. Most domestic listed companies engaged in Bitcoin TREASURE business are buying Bitcoins overseas or in the over-the-counter market.
These regulations are expected to be gradually eased starting at the end of this year. Authorities plan to institutionalize corporate investments in virtual assets by sequentially allowing account openings for non-profit organizations, listed companies, and professional investors. Initially, account openings for non-profit organizations and virtual asset exchanges will be permitted, and trading of virtual assets by listed companies will be allowed on a trial basis.
An industry insider mentioned, "If corporate investments in virtual assets are legalized by the end of this year, it will likely become possible to recognize price gains as profits." This means that even technology special listed companies with almost no sales could avoid delisting if the prices of virtual assets like Bitcoin rise.
Another industry insider stated, "As the number of technology special listed companies experiencing management difficulties increases, inquiries from foreign virtual asset investors about domestic investments are also rising," adding, "If domestic corporations are allowed to invest in virtual assets starting in the second half of this year, related thematic stocks are expected to increase significantly."
There are also concerns that cases like Bridge Biotherapeutics and Bitmax may become backdoor listing routes for virtual asset companies. In particular, technology special listed companies in the biopharmaceutical field can easily resolve the loss before corporate tax issue, which is one of the requirements for delisting.