Nilam Resources, a small-cap company, has raised concerns after announcing plans to acquire $1.7 billion worth of Bitcoin. The company has been labeled as a “public interest concern” by OTC Markets Group, which operates the OTC Pink platform. This label is given to companies that are deemed risky for potential buyers. OTC Markets explained that this concern could be due to spam campaigns, questionable stock promotion, ongoing investigations, regulatory suspensions, or other disruptive actions.
Additionally, Nilam Resources has been designated as a “Shell Risk” based on its financial data and income-related metrics. Despite these warnings, the company’s share prices skyrocketed by 1,500% on March 26, reaching a new all-time high of 33 cents.
On March 25, Nilam Resources announced that it had entered into a Letter of Intent to acquire a company that plans to hold 24,800 Bitcoin. The company claims that this deal has been in the works for months. They intend to issue a newly authorized “preferred stock” in exchange for the Bitcoin at a discounted rate. However, many in the crypto community are skeptical of the company’s ability to follow through with this ambitious plan, suggesting that it is merely a marketing stunt.
Bitcoin analyst Tuur Demeester and crypto YouTuber Quinten Francois both expressed doubts about the legitimacy of the announcement. Dylan LeClair, director of market intelligence at UTXO Management, also shared concerns, stating that the plan would only work if there is genuine demand for the equity sale.
If Nilam Resources is successful, it will hold more Bitcoin than any other publicly listed company in the US, except for MicroStrategy. This would surpass companies like Tesla and major Bitcoin miners. Former CEO Ron McIntyre has criticized the announcement, claiming that it was made without his review and that he is not fully aware of the details of the deal. McIntyre also stated that there will be a FINRA investigation into Nilam Resources.
Nilam Resources describes itself as an investment holding company that recently shifted its focus to “frontier tech” investments. They have not yet responded to requests for comment.