Mike Novogratz’s Galaxy Galaxy Digital Liquidates Block.One Stake for $72.1 Million; Nets 123% ReturnLiquidates Stake Worth $72.1 Million in Block.One

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According to a press release issued May 21, 2019, Mike Novogratz’s Galaxy Digital Holdings Ltd. Received $71.2 million after it sold its stake in Block.One, the firm behind the EOS blockchain network.

Galaxy Digital Will No Longer Hold a Material Investment Position in Block.One

Cryptocurrency merchant bank Galaxy Digital Ltd. announced an update regarding its material investment position in Block.One. Reportedly, Galaxy Digital Holdings LP has received about $71.2 million by liquidating a part of its ownership in Block.One.

Per the press release, Galaxy Digital Holdings LP’s – also known as “Partnership” – on April 18, 2019, accepted a tender offer in the ordinary shares of Block.One.

In finance, a tender offer refers to a public and open offer in which some or all of a shareholder’s shares are purchased at a fixed price. The purchase price is typically at a premium to the market price to compensate the seller for their immediate sell position.

The tender offer officially came to a closure on May 20, 2019, after Partnership received the said amount from Block.One. The holding company bagged an impressive 123 percent gain on the realized investment, the press released noted. Further, the sharp fall in Partnership’s stake in Block.One means that it’s remaining ordinary shares will not represent a material investment position.

Notably, for an investment to be termed a “material investment position,” a number of quantitative and qualitative factors are considered. For Partnership, these factors included the proportion of each investment to total assets, the degree of diversification of the portfolio, and the liquidity of each investment, among others.

Michael Novogratz, CEO, and founder of Galaxy Digital shared his thoughts on the development. He said:

The acceptance of Block.one’s tender offer reflected a decision to rebalance the portfolio to maintain an appropriate level of diversification after the position increased due to its substantial outperformance relative to the remainder of the portfolio.

Adding:

We continue to work closely with Block.one as a key partner across a number of our business lines, including the Galaxy EOS VC Fund, which invests in companies building on the EOS.IO protocol, and remains excited about the EOS.IO protocol.

Recent Moves by Galaxy Digital

The fresh influx of capital for Galaxy Digital could well be part of its plans to expand its footprint in the crypto ecosystem. As reported by BTCManager on January 30, 2019, the firm was looking to raise some $250 million for digital currency lending business.

However, not all is hunky-dory for Novogratz’s company as on May 1, 2019, reports emerged stating that Galaxy Digital had incurred a net comprehensive loss of $272.1 million in 2018.

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