Zhibao bitcoin treasury plan ties $220 million stock sale to BTC

Zhibao’s bitcoin treasury plan would put roughly 3,500 BTC on the balance sheet of a small Nasdaq-listed Chinese insurance technology company. For retail investors, the headline is less about a routine stock sale and more about control: the proposed buyer would be able to name most of Zhibao’s board if the deal closes.

Zhibao Technology Inc., a Shanghai-based company that sells digital insurance products in China and trades on Nasdaq under ZBAO, said Wednesday that it signed a non-binding term sheet with Joyertech and Information OPC for a proposed private investment in public equity, or PIPE, financing.

According to Zhibao’s press release, the buyer, or an entity it designates, is expected to subscribe for Zhibao securities using about 3,500 Bitcoin as consideration. The company said that amount was worth about $220 million at current prices.

The term sheet is non-binding, which means the parties have outlined a proposed transaction but have not signed final agreements. Zhibao said the deal remains subject to final valuation, custody arrangements, audit checks, regulatory review, Nasdaq compliance and definitive documents.

What is Zhibao's Bitcoin deal?

A PIPE is a private sale of a public company’s securities directly to an investor, rather than a stock sale through the open market. In Zhibao’s proposed transaction, Joyertech and Information OPC would pay with Bitcoin rather than cash.

That structure would give Zhibao a Bitcoin treasury immediately if the transaction is completed. A corporate treasury is the pool of assets a company holds to manage liquidity, funding needs and reserves, so adding Bitcoin would expose Zhibao’s balance sheet to the price swings of the crypto asset.

Who would control Zhibao after the PIPE?

The proposed financing includes a governance shift. Zhibao said the buyer is expected to designate a majority of the company’s board of directors at the closing of the PIPE financing, while Zhibao intends to keep its existing operations in place.

That would give Joyertech board-level control while the company continues its insurance technology business. Zhibao describes itself as a digital embedded insurance company in China, using a platform-as-a-service model that lets other businesses offer insurance products to their customers.

The company says it launched China’s first digital insurance brokerage platform in 2020. Its business focus is separate from Bitcoin, which makes the proposed financing notable for investors tracking public companies that use crypto as part of their treasury strategy.

Why did Zhibao stock move?

The announcement came shortly after Zhibao disclosed a listing problem. On July 15, the company said it received a Nasdaq deficiency letter because its shares had traded below $1.

After the Bitcoin treasury announcement, Zhibao’s stock briefly rose from about $0.15 to $0.40 in less than four hours, according to market data cited by Decrypt. The move later cooled, with the stock settling near $0.24, still up around 60% from the earlier level.

The deal has not closed. Until final agreements are signed and the required reviews are completed, Zhibao’s proposed Bitcoin-funded PIPE remains a plan rather than a completed treasury shift.

This story draws on original reporting from Decrypt.