Mum or dad firm will make investments as much as half of its extra money within the “highly volatile” cryptocurrency to pave the way in which for enabling bitcoin funds for brokers and prospects at a later date .
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Flat-fee fee brokerage and actual property companies platform Fathom Holdings is leaping on the bitcoin bandwagon, saying it is going to make investments as much as half of its extra money within the cryptocurrency to pave the way in which for enabling bitcoin funds for brokers and prospects at a later date.
Fathom mentioned it plans to buy as much as $500,000 in bitcoin or bitcoin exchange-traded funds (ETFs) over the following two weeks, fairly than investing that cash in additional conventional interest-bearing investments like certificates of deposit or U.S. authorities bonds.
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Joanne Zach
“The integration of bitcoin into commercial and financial strategies has accelerated across financial markets, positioning it as both a hedge against inflation and a safeguard against economic and currency risks in the global economy, Fathom Chief Financial Officer Joanne Zach said, in a statement. “Our bitcoin strategy diversifies our treasury holdings, and we believe positions Fathom at the forefront of digital currency transactions in the real estate industry.”
In its Jan. 23 enterprise replace, Fathom acknowledged the danger of investing in bitcoin and mentioned it additionally plans to boost as much as $10 million by way of a shelf registration assertion that permits it to promote shares of frequent inventory as wanted.
Bitcoin is “a highly volatile asset” that “does not pay interest or dividends,” and the corporate’s bitcoin technique has not been examined, Fathom warned buyers.
“Although we believe bitcoin, due to its limited supply, has the potential to serve as a hedge against inflation in the long term, the short-term price of bitcoin declined in recent periods during which the inflation rate increased,” Fathom executives mentioned in a regulatory submitting. “Some investors and other market participants may disagree with our bitcoin acquisition strategy or actions we undertake to implement it.”
If bitcoin costs have been to fall, or Fathom’s bitcoin technique “otherwise proves unsuccessful, our financial condition, results of operations, and the market price of our common stock would be materially adversely impacted.”
The shelf registration assertion additionally has the potential to dilute the worth of present buyers’ shares. Fathom’s share value, which hit a 52-week excessive of $3.37 on Sept. 17, 2024, touched an all-time low of $1.23 after the Jan. 23 shelf registration and bitcoin announcement.
Fathom had 22.62 million shares excellent as of Sept. 30, and a market capitalization of $28.3 million at Thursday’s closing value of $1.25.
After elevating $31.3 million in a 2020 preliminary public providing, Cary, North Carolina-based Fathom Holding went on an acquisition spree to broaden the scope of its enterprise. Fathom generates greater than 90 p.c of its income by way of its actual property brokerage enterprise, Fathom Realty, however can be a supplier of mortgages, title insurance coverage and expertise for brokers.
Fathom issued $5 million in convertible notes in September to speed up its development plans and, in November, introduced Fathom Realty’s acquisition of My Dwelling Group, the third-biggest actual property brokerage in Arizona with 2,200 brokers.
The combination of My Dwelling Group into the Fathom platform is progressing as deliberate, the corporate mentioned, and may contribute greater than $110 million in income this yr.
Fathom additionally supplied an replace on some key enterprise metrics upfront of its fourth quarter 2024 earnings report.
Fathom Realty’s agent depend grew by 23 p.c in 2024, to roughly 14,500 as of December 31, with This fall transaction depend up 16.5 p.c from the identical quarter a yr in the past.
Whereas This fall 2024 is anticipated to return in between 7 p.c and 10 p.c greater than Q3, Fathom initiatives it is going to publish a $7.3 million This fall web loss, down from $8.4 million a yr in the past.
On Thursday, Fathom introduced that it hopes to spice up its brokers’ visibility and supply them with superior native advertising instruments by way of a partnership with Locafy, an Australian-based firm specializing in “entity-based” search engine marketing (search engine marketing).
