David Bailey helped bring Donald Trump to Bitcoin, then built a public company to buy it. That company is now worth less than half the Bitcoin sitting on its own balance sheet.
Nakamoto was designed to issue shares and convert the proceeds into Bitcoin, a mechanism that only works while the stock trades above what the holdings are worth. According to Yahoo Finance, its market capitalisation was $126.2 million intraday on September 1 against 4,467 Bitcoin, and 3,805 of those coins are pledged to lenders.
Nakamoto Inc (NASDAQ: NAKA), chaired by Trump crypto adviser David Bailey, reported a net loss of $133.0 million for the second quarter of 2026 following $238.8 million in the first, and closed at $7.05 on September 1, down 5.87% on the day.
What the Quarter Showed
Total operating revenue was $35.9 million — $25.6 million from media, information services and asset management, and $10.4 million from Bitcoin treasury and derivatives activity. Against that sat an operating loss of $149.1 million.
Two non-cash items account for most of it: $105.2 million in goodwill impairment and $48.7 million in mark-to-market losses on digital assets. The company said the impairment reflects a lower valuation of its acquired businesses amid the market decline, while their carrying value remains roughly in line with what it paid.
Excluding those, Nakamoto reported adjusted operating income of $7.3 million, its first positive figure since becoming a Bitcoin operating company. The net loss came to $6.65 per diluted share, against a $2.4 million loss a year earlier.
Most of the Bitcoin Is Pledged
According to BitcoinTreasuries, Nakamoto held 4,467 Bitcoin as of 2nd September, with an aggregate fair value of approximately $343.2 million at that date. Of those, 3,805 are pledged as collateral against a note payable.
Total debt stood at $164.7 million, cash at $19.1 million, and the company reported a net leverage to digital assets ratio of 56%. During the quarter it repaid 45 million USDT of its Bitcoin-backed loan, funded mainly by roughly $48 million in net proceeds from selling about 600 Bitcoin and certain derivative positions, and extended around 105 million USDT of principal to June 30, 2027. The Crypto Times reported that refinancing in June. The board also authorised a repurchase programme of up to $25 million, which the company says reflects confidence in its intrinsic value.
The stock closed at $7.05 on September 1, down 5.87% from a previous close of $7.49, on volume of 154,744 shares against a 223,042 average. Its 52-week range runs from $3.33 to $343.20 on a split-adjusted basis, and trailing twelve-month earnings per share stood at -$30.93. Nakamoto ranks 21st among public Bitcoin holders tracked by BitcoinTreasuries.net, below ProCap Financial at 5,405 and above Boyaa Interactive at 4,201, with Trump Media and Technology Group tenth at 12,062.
The Reverse Split and the Healthcare Exit
Nasdaq warned the company in December that its shares faced delisting after trading below $1 for 30 consecutive days. Shareholders approved a reverse split on May 8, authorising a ratio between 1-for-20 and 1-for-50, and the board selected 1-for-40, effective at the open on May 22.
Outstanding shares fell from about 696.1 million to roughly 17.4 million, closing the quarter at 17,894,943, with 22,361,728 on a fully diluted basis. The stock hit a post-split low of $4.70 the following week, down more than 99% from a May 2025 high near $34.
Nakamoto completed the closure of its legacy healthcare clinics on June 19, reclassifying current and prior-year healthcare results as discontinued operations and completing its transition out of the KindlyMD business it merged with.
How the Position Was Built
The company began as a merger between Bailey’s Nakamoto Holdings and KindlyMD, announced in May 2025, which sent KindlyMD shares up 600% in a day. Financing followed quickly, including $51.5 million raised in 72 hours, bringing the combined total to $563 million, or $763 million including convertible notes.
The merger completed in August 2025 with a stated long-term target of one million BTC. Days later the company bought 5,743 Bitcoin for roughly $679 million at an average price of $118,204, then announced a $5 billion at-the-market equity programme.
That average purchase price is the difficulty. Bitcoin fell below $60,000 earlier this year before recovering toward $80,000, leaving the treasury acquired well above current levels. Bailey told Bloomberg this week that the company bought Bitcoin at the top, and that Bitcoin then performed very poorly.
The Related-Party Acquisitions
In February, Nakamoto acquired BTC Inc and UTXO Management in a $107 million all-stock deal. Bailey held positions across all three companies, making it a related-party transaction, and it increased the fully diluted share count by roughly 70%. Short seller Jim Chanos criticised the deal publicly; Bailey has said the mergers were always the plan and were disclosed in advance.
Those businesses now supply most of the revenue and most of the impairment. Media and information services produced $25.1 million of revenue and a $75.8 million operating loss, of which $80.6 million was goodwill impairment. Asset management produced $0.5 million of revenue with no performance fees recognised, and a $25.6 million operating loss including $24.6 million of impairment.
The Bitcoin 2026 conference generated $22.6 million. The company argues the fair comparison is Bitcoin 2023, the last conference held during a comparable drawdown, which earned $13.1 million — implying growth of about 73% over three years.
