Bitcoin Shop announced an equity redemption in a press release given to Market Watch. The officers and directors unanimously agreed to the redemption of 12,750,000 shares of their common stock. This redemption serves as a discounted buyback of the founders' common stock as the total payment for the 12,750,000 shares was filed as $2,491. This implies the stock was redeemed for $0.0002 per share, a 40,000% discount of the current market value of BTCS at $0.09 per share.
This redemption is an attempt to strengthen the shareholders' equity, as the stock has been slowly downtrending over the past year. Charles Allen, Chief Executive Officer of Bitcoin Shop, released a statement with the press release:
In addition to redeeming a portion of our founders' equity for the benefit of our public shareholders, as previously announced, management has also entered into lockup agreements for the majority of their remaining held equity until February 5, 2017.
Yeah well, basically, this is a disguised gift of stock from directors / interested parties to company designed to increase per share value. Borderline fraudulent.
A further investigation into the company's quarterly report for Q3 2014 illuminates significant losses. The company only realized a revenue of $4,912 for the quarter, however this is minute in comparison to the operating expenses totaling $2,668,489 of which $2,626,581 was categorized as "general and administrative." The past six months saw a net loss of approximately $0.03 per share in shareholder equity from operations alone.