Nilam Resources, a micro-cap company that made headlines this week with its plans to acquire $1.7 billion worth of Bitcoin (BTC), has raised concerns and been labeled as a “public interest concern” due to its rapid 1,500% surge in share prices on March 26.
OTC Markets Group, the operator of OTC Pink, a platform for over-the-counter stock trading, has designated Nilam Resources (NILA) as “Caveat Emptor,” a label given to companies that should be approached with caution.
According to OTC Markets, this “public interest concern” label may be due to a spam campaign, questionable stock promotion, ongoing investigations, regulatory suspensions, or other disruptive corporate actions.
Furthermore, the OTC listing for NILA also indicates that it has been categorized as a “Shell Risk,” suggesting that it may be a shell company based on its financial data and income-related metrics.
On March 25, Nilam Resources, an investment holding company, announced that it had entered into a Letter of Intent to acquire a company that plans to hold 24,800 Bitcoin. The deal, which the company claims has been in the works for months, involves the issuance of newly authorized “preferred stock” in exchange for the Bitcoin at a discounted rate.
The announcement led to a significant increase in the company’s share prices, reaching an all-time high of 33 cents, a 1,700% surge from 1.8 cents the previous week. The company’s current market capitalization stands at $280 million, according to OTCMarkets.
However, many in the cryptocurrency community are skeptical about the company’s ability to follow through with its ambitious plan, with some suggesting that the announcement is merely a marketing stunt.
Bitcoin analyst Tuur Demeester and crypto YouTuber Quinten Francois both expressed doubts about the legitimacy of the filing, with Demeester removing his initial tweet after realizing it might be a stunt from a failing penny stock.
Dylan LeClair, director of market intelligence at digital asset fund UTXO Management, also shared doubts about the plan, stating that it would only work if there was genuine demand for the equity sale.
If successful, Nilam Resources would become the largest publicly listed Bitcoin holder in the United States, surpassing companies like Tesla and major Bitcoin miners such as Riot Blockchain, Hut 8 Corp, and Marathon Digital Holdings.
Former Nilam Resources CEO Ron McIntyre has criticized the announcement, claiming that the press release was issued without his review and that he was not fully aware of the details of the deal. McIntyre also mentioned the possibility of a FINRA investigation into Nilam Resources.
Despite these concerns, Nilam Resources describes itself as an investment holding company that recently shifted its focus to “frontier tech” sectors such as medtech, fintech, and climate tech.
As of now, Nilam Resources has not responded to requests for comment.