Even though the company points to growth, Yang said the reported $38 million in adjusted earnings before interest, taxes, depreciation, and amortization for the 12 months ending with June 2022 is “pretty paltry given the valuation.”
Still, Gus Garcia, co-CEO of the SPAC that Bitcoin Depot intends to merge with, GSR II Meteora Acquisition Corp., said that based on other metrics, including margins and revenue growth, the ATM provider is better positioned than comparable financial services companies. The company claims its transactions volume grew at a mean annual rate of 164% between 2020 and 2021.
“We think this is underpriced. It’s a bargain. It’s attractively priced,” Garcia said.
Mintz clearly agrees, stressing that the global demand is apparent.
“There’s dire need for a product like this throughout the world, where a lot more people are left out of the financial system than the U.S. and Canada,” he said, without elaborating on where the company could next expand internationally.
Bitcoin Depot ultimately expects to reap about $320 million in SPAC proceeds held in a trust account. But Garcia explained that because of the way SPACs work, investors can redeem their money before the deal is closed, so the actual amount Bitcoin Depot gets from the transaction could be lower than $320 million.
‘Here to stay’
Another key part of Bitcoin Depot’s public listing is how it’s going public—via a merger with a special purpose acquisition company.
SPACs, or blank-check companies, grew in popularity last year as the meme stock frenzy saw a surge in risky bets, but they’ve drawn more criticism as many of the companies that used them have seen their shares fall drastically.
These types of public listings usually take less time to complete compared with traditional initial public offerings—four months instead of closer to 12 months—said Varun Kumar, cofounder and CEO of Hashflow, a decentralized trading platform.
“Speed and lesser regulatory obligations and requirements can make SPACs a more attractive vehicle to raise capital,” Kumar told Fortune.
But in March, the Securities and Exchange Commission proposed new rules that would put restrictions on the timeline during which a SPAC can make a deal or otherwise be subjected to increased compliance requirements. This could cause almost half of all SPACs still in the process of closing a deal to liquidate, according to a report by Institutional Investor.
The ATM provider is looking to close the deal in the first quarter of 2023, which, if successful, would give investors looking for indirect exposure to crypto another option, similar to buying shares of Coinbase or Microstrategy.
“Bitcoin and the growth of the digital asset market are here to stay,” Kumar said. “Regardless of how a company goes public, having yet another crypto company ticker shows the industry’s maturity and how far it has come.”
Should Bitcoin Depot’s SPAC deal go through, it also gives Mintz, who has 100% control of the company, a way to cash out some shares. He told Fortune he intends to stay on as CEO.
