The Bloomberg Galaxy Digital Holdings Ltd. is expecting a loss of $300 million in net comprehensive income this quarter, as uncertainty swirls around the broader criptosphere.
The preliminary update released Friday was released in light of recent market conditions, and revealed the potential hit in the currency merchant bank's preliminary update. Comprehensive income typically combines net income and any to-be realized financial gains or losses.
The statement said that the $300 million dampener would bring partners capital -- or total equity -- to $2.2 billion, a decline of 12% compared to March 31, 2022. The news comes in the midst of a crash in the criptocurrency market, fueled by the dissolution of the algorithmic stable coin TerraUSD and its sister coin Luna. A sell-off of Bitcoin and other cryptocurrencies caused a loss of $270 billion of the market value to bewiped out by the recent depegging of TerraUSD from the dollar.
In its May 13 update, Galaxy Digital said that it remains in a strong capital and liquidity position, because of the fact that it does not use algorithmic stablecoins in its treasury. The company's liquidity is about $1.6 billion, including $800 million in cash and $800 million in net digital assets.
Michael Novogratz, who has championed TerraUSD, saw his fortune fall to $2.5 billion, from $8.5 billion in early November.
BTIG analysts Mark Palmer and Andrew Harte wrote on Friday that any concerns that GLXY would be subject to a large loss due to exposure to LUNA token are unwarranted, as well as average collateralization levels well over 100% at Galaxy Digital Trading, and smooth operation and execution of the platform despite recent market volatility.
The BTIG analysts said that their estimates for Galaxy, which they rated Buy with a price target of C $37 $28.50, are under review.
In the first quarter, the company had a net loss of $112 million, due to digital asset price declines. The company s CFO Alex Ioffe said that partners capital was $2.5 billion by the end of March, split between $850 million in cash, $440 million in stable coins and $400 million in liquid net digital assets.
The stock was up 15% on Friday afternoon to C $8.90.
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