Datavault AI shares drop 48 percent after bitcoin deal disclosure
The firm said it cannot withdraw bitcoin from a $150 million deal with Scilex and will restate four financial periods to remove $49 million in assets.
Key takeaways
- 1Datavault AI shares fell 48 percent following the disclosure.
- 2The company cannot withdraw bitcoin from a $150 million deal with Scilex.
- 3Datavault will restate four financial periods of its accounts.
- 4The firm will remove $49 million from its June 2026 asset report.
- 5The issues involve bitcoin held on the Biconomy platform.
Datavault AI shares fell 48 percent on Wednesday after the company disclosed it could not access bitcoin linked to a $150 million investment deal. The stock price plummeted following a filing that detailed the inability to withdraw funds from a transaction with Scilex. This announcement triggered a sharp sell-off as investors reacted to the potential loss of capital.
The Block reported that Scilex had agreed to purchase $150 million worth of Datavault AI shares, with the payment settled in bitcoin. Datavault now says the cryptocurrency tied to this deal is currently unavailable for withdrawal. The disclosure has prompted a significant reassessment of the company's financial standing and its previous reporting.
The firm will restate four financial periods to correct its balance sheets. The Defiant reported that Datavault expects to remove $49 million from its assets for the period ending June 2026. This adjustment follows a review of the bitcoin-funded equity deal and the risks associated with the platform where the assets were held.
Publicly traded companies are required to report the fair market value of digital assets on their balance sheets. When assets become inaccessible or their ownership is disputed, firms must issue restatements to ensure their financial health is accurately represented to shareholders. This process often leads to sharp declines in market valuation as investor confidence wavers.
The disclosure included details regarding Biconomy, the platform where the bitcoin was reportedly held. Datavault said the withdrawal issues emerged during its latest review of asset custody. The company did not specify the exact nature of the block on the funds or whether the issue lies with the platform's liquidity or a technical failure.
The $150 million deal with Scilex was intended to provide Datavault with capital to fund its operations. By accepting bitcoin as payment, the company exposed itself to both the price volatility of the asset and the operational risks of crypto custody. The loss of access to these funds removes a large portion of the expected capital injection.
Market analysts said the restatement of four financial periods suggests the accounting issues have been present for over a year. The $49 million write-down for the June 2026 period represents a substantial portion of the company's liquid holdings. Datavault has not yet confirmed if it will seek legal remedies to recover the bitcoin.
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