For Galaxy’s founder, the former Goldman Sachs partner and crypto bull Mike Novogratz, the route to secure this week’s listing has been long-winded. Without the two years’ of audited financials required for a U.S. initial public offering (IPO), the fledgling bank opted for a so-called “reverse takeover” route by merging with an already TSX-listed shell company.
The process has reportedly taken a “frustrating” — in Novogratz’s words — eight months, with Canadian regulators closely scrutinizing the firm and pushing back its trading debut from April to August. In a TV interview with BNN Bloomberg in Toronto, Novogratz said:
“If I knew what I know now, knew the crypto markets were going to swoon as much, and it was going to take so long, I might have stayed private for another year or so and then gone public. But I don’t think it’s a mistake.”
This spring saw a protracted downtrend in the crypto markets, with Bitcoin (BTC) dipping below $6,000 after its industry record highs of $20,000 in December 2017. According to Bloomberg, Galaxy sold shares at $5 Canadian dollars (about $3.80 USD) apiece in a private placement in January, weeks after Bitcoin had peaked.
“Unfortunately, the Canadian capital markets aren’t roaring anymore,” Novogratz is quoted as saying in the interview, adding that he has “faith that they will come back.” Placing Galaxy’s difficulties in the wider listings landscape, Novogratz noted,
“There was a surge of companies that listed in Canada and they all traded really poorly. I think the regulators got a little bit more nervous and said, ‘Hey, wait a minute, let’s make sure we know what we’re seeing here’.”
Brady Fletcher, managing director of the TSX Venture Exchange, told Bloomberg that although the due diligence process “probably takes a little bit longer than entrepreneurs like Mike would like it to,” TSX is nonetheless “excited about the upcoming listing and [thinks that] Galaxy is a great story.”
“We’re going to be a global company; we want to be globally traded.”
The firm has also recently ventured into the crypto-lending sphere, leading a $52.5 million fundraising round for BlockFi, a firm that offers corporate and retail loans on backed by digital asset holdings.