Ben Strack

<div id="highlights-block_624733b5db268" class="highlights">
 <ul>
 <li>The acquisition is set to close after Galaxy Digital becomes a Delaware-based company</li>
 <li>Galaxy reported that its first quarter net comprehensive income is expected to be a loss of between $110 million and $130 million</li>
 </ul>
 
</div>



Galaxy Digital’s expected fourth quarter acquisition of institutional crypto platform BitGo has been delayed, and the deal is now anticipated to close later this year.



The company <a href="https://cms.blockworks.co/galaxy-digital-acquires-bitgo-for-1-2b/" target="_blank" rel="noreferrer noopener">first revealed its intent</a> to acquire BitGo in May 2021 in a cash and stock transaction valued at roughly $1.2 billion.



The purchase is now projected to close after Galaxy Digital becomes a Delaware corporation, according to a statement Thursday. That’s expected to happen between the second and fourth quarter, subject to SEC review.



“That&#8217;s a pretty broad window, and I think we&#8217;re going to hope for the best, and we&#8217;re going to continue to engage with the SEC,” CEO Mike Novogratz said on an earnings call.



The company then intends to list publicly on the Nasdaq. A source familiar with the matter said the listing process — and SEC approval — has taken longer than expected. If Galaxy were to close the BitGo deal before incorporating in the US, the source added, the company would still have to get regulatory approval for the purchase.&nbsp;



That would mean going through an intensive process twice: once in Canada and once in the US. The federal securities regulator has seen delays in approvals under the Biden administration, which is applying a heavier regulatory touch than the Trump regime. Other new listings, including SPACs, have likewise been delayed.



The updated cash and equity deal — $265 million and 44.8 million newly issued shares — values BitGo just below $1.2 billion. Other adjustments include BitGo shareholders owning roughly 12% of the combined company, up from an initial 10%.



Though the equity infusion dilutes the value of prior shareholders, the additional equity means new BitGo hires will also get in on the deal — a key component for retention.



Galaxy will have to pay $100 million to BitGo “in certain circumstances” if the sale doesn’t go through by the end of the year.&nbsp;



The deal was renegotiated due in part to <a href="https://www.bitgo.com" target="_blank" rel="noreferrer noopener">BitGo’s growth</a>, Novogratz said, adding the soon-to-be acquired company hired roughly 150 people since the deal was first announced.



“We remain committed to integrating BitGo and becoming an institutional crypto platform, period,” Novogratz said. “It&#8217;s a bigger and better company, and we&#8217;ll continue to work on integration side-by-side until we close the deal.”



The acquisition of BitGo is a significant step toward allowing Galaxy Digital to provide a full set of prime broker-type services to institutional investors, including custody, lending, trade execution, pricing and administrative services, Andrew Young, an investment banking analyst at Architect Partners wrote in a research note.



“This is a big financial commitment for Galaxy but perfectly consistent with the strategy to become the go-to crypto asset investment platform of institutional investors,” Young wrote. “The full set of capabilities are soon to be table stakes and are a necessity for institutional adoption of crypto assets.”



Damien Vanderwilt, Galaxy’s co-president and head of global markets, said on the call with analysts that the prolonged close of the BitGo deal is due to a focus on delivering new products — such as BitGo coin support and downstream services.



Galaxy reported net comprehensive income of $521 million in the fourth quarter. The company noted its first quarter net comprehensive income is expected to be a loss of between $110 million and $130 million, saying the crypto industry’s market capitalization is down about 4% since the end of 2021.



“We are ready for a volatile year, if that&#8217;s what we get, given the headwinds in macro,” Novogratz said. “But we&#8217;re certainly excited about getting through the SEC process and getting BitGo integrated with us as fast as we can.”



Michael Bodley contributed reporting.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.

Awaiting US Listing, Galaxy Digital Delays Purchase of Crypto Platform BitGo

Casey Wagner

<div id="highlights-block_60b68b8785cb1" class="highlights">
 <ul>
 <li>Sports merchandise company Fanatics will be Candy’s majority shareholder</li>
 <li>Novogratz and Vaynerchuk will be equity partners and serve as co-chairs</li>
 </ul>
 
</div>



Nearly two years after the launch of the non-fungible token platform NBA Top Shot, a new group of entrepreneurs is looking to capitalize on the popular sports NFT market by launching a new company called Candy Digital.



Included in the deal are Fanatics executive chairman Michael Rubin, Galaxy Digital founder and CEO Mike Novogratz and digital media entrepreneur Gary Vaynerchuck. Major League Baseball will be Candy’s first partner, according to a <a href="https://www.fanaticsinc.com/press-releases/fanatics-galaxy-digital-and-entrepreneur-gary-vaynerchuk-back-candy-digital-a-next-generation-digital-collectible-company" target="_blank" rel="noreferrer noopener">statement</a> released by Fanatics Tuesday. 



Sports merchandise company Fanatics will be Candy’s majority shareholder. Novogratz and Vaynerchuk will be equity partners and serve as co-chairs. Vaynerchuk will be a board member and advisor.



Each member of the group brings unique experience to the table. Rubin is the mastermind behind the world’s largest licensed sports apparel retailer. Fanatics has a customer base of more than 80 million.&nbsp;



Vaynerchuk, an early entrant into the sports card market, is the founder of digital media company VaynerMedia and athlete management firm VaynerSports. Former hedge fund manager Novogratz is one of the most vocal and respected crypto advocates on Wall Street. 



“The NFT space has traditionally focused on a small community of crypto-first customers, Candy&#8217;s sophisticated team is building immersive brand experiences that appeal to crypto-savvy players, consumers, memorabilia collectors, and sports fans alike, and Galaxy looks forward to participating in the evolution in collectibles,&#8221; said Mike Novogratz, founder, and CEO of Galaxy Digital and co-chair of Candy Digital.



Candy is hoping to capitalize on the unprecedented interest in the sports NFT market right now. NFTs experienced a major surge earlier this year as investors flocked to assets like autographs and trading cards. Sports <a href="https://cms.blockworks.co/the-investors-guide-to-nfts/" target="_blank" rel="noreferrer noopener">NFTs</a> have dominated headlines and raked in millions in revenue over the past six months. 



Major League Baseball is following in the NFT footsteps of the National Hockey League and National Basketball Association with its Candy partnership.



“From trading cards to autographed balls, baseball fans have demonstrated their passion for the sport and its players through collectibles for decades,” said Robert D. Manfred, Jr., Commissioner of Baseball, in a statement. “In working with Candy Digital to offer NFTs to MLB fans, we’re delivering an exciting new addition to the robust baseball collectible market. The founders of Candy are a dynamic group of executives with an impressive track record. We’re excited to be the first partner in this new venture with a team uniquely positioned for success.”&nbsp;



Candy’s first collectible will be a Lou Gehrig NFT of the baseball player’s July 4, 1939 farewell speech to be released on July 4. Candy will be the hub for purchasing, trading and sharing all officially licensed baseball NFTs going forward.