Galaxy Digital, founded by former hedge fund manager Michael Novogratz, has received $71.2 million after selling its shares in Block.one, according to reports on May 21st.
According to the announcement, Galaxy Digital accepted a tender offer on its ordinary shares in Block.one, closing the transaction on Monday.
Galaxy Digital has reported the sale of its shares, claiming it generated a 123% return on its realized investment and following the transaction, its remaining shares in Block.one “will no longer maintain a material investment position.”
Galaxy Digital and Block.one had partnered up in a joint venture in 2018 to invest $325 million into the EOS ecosystem. Block.one is the main development company behind the EOS protocol.
The crypto merchant bank received $71.2 million in the deal, relinquishing its material investor position. Such labelling usually means a position of more than $100 million. However, the company stated that it takes multiple factors into account to determine whether a position is material.
Michael Novogratz, CEO and founder of Galaxy Digital, has stated that the acceptance of the tender offer was a decision made in order to rebalance and appropriately diversify its portfolio as a result of the shares substantially outperforming other areas. He further added that this development does not mean the end to Galaxy’s partnership with Block.one.
According to the Novogratz, both companies will continue to work on other projects such as the Galaxy EOS VC Fund, which primarily backs startups that are developing applications on the EOS blockchain network.
“We continue to work closely with Block.one as a key partner across a number of our business lines, including the Galaxy EOS VC Fund, which invests in companies building on the EOS.IO protocol, and remain excited about the EOS.IO protocol,” he said in a statement.
Meanhwile, in July of last year, Block.one received financing from a number of big-name investors such as PayPal co-founder Peter Thiel and Bitmain co-founder Jihan Wu.
Galaxy Digital’s exit comes as part of Block.one’s buyback program of 10 percent of its company shares.
According to a report from Bloomberg, Block.one’s shares repurchase offer is valued at around $2.3 billion, up nearly 66 times from what it was valued at back in 2017 at the funding round. Currently, the repurchase price for the buyback is approximately $1,500 per share, whereas during the 2017 funding round it was offered at $22.5 per share.
The report further revealed that Block.one had about $3 billion in assets including cash and investments at the end of February, according to data sent by Block.one sent to shareholders and the news outlet. In addition to that, Block.one owns as many as 140,000 Bitcoin (BTC).