Will cryptocurrency investors now see an interest in Montreal ready-to-cook meal provider Marché Goodfood?
Posted at 4:33 p.m.
Reactions are mixed after the announcement of Goodfood’s decision to add bitcoin to its treasury strategy. The company revealed an initial bitcoin investment of approximately $1 million through an exchange-traded fund (ETF) on Thursday.
“This is the beginning of a strategic reserve of bitcoins,” says the co-founder and big boss of Goodfood, Jonathan Ferrari, in an interview. “The objective is to strengthen the balance sheet and create long-term value for shareholders. »
The CEO argues that accumulating bitcoin protects against inflation and rising food prices, and harnesses its potential as digital capital. “The Canadian dollar has lost more than 20% of its value over the past 5 years and 80% over the past 50 years if we take inflation into account,” he says.
PHOTO ALAIN ROBERGE, LA PRESSE ARCHIVES
The co-founder and big boss of Goodfood, Jonathan Ferrari
Jonathan Ferrari says he has been involved in the cryptocurrency space for 10 years. He says he personally owns bitcoins worth a “significant” value and adds that he has already been a shareholder in a cryptomining company.
He says it’s easier right now for Goodfood to invest in bitcoin through an ETF, but hopes the company can acquire bitcoins later this year.
“It’s less complex right now in an ETF for a public company because of regulations. By working with the Financial Markets Authority, we would like to be able to hold bitcoins directly later this year. »
And if the value of bitcoin falls, it will be an opportunity to buy more, he says. “We are comfortable with volatility in a context where we are in an accumulation phase. »
Goodfood intends to invest in bitcoin using part of the future excess cash flow expected from the strategy unveiled last year consisting of building a portfolio of brands by purchasing companies offering consumer products.
Goodfood notably announced in November the acquisition of a majority stake in an artisanal tea producer.
Goodfood shares rose 8% on Thursday to close at 49 cents in Toronto.
For portfolio manager Martin Lalonde of the Rivemont firm, Goodfood’s decision is another example of the integration of bitcoin into the traditional economy.
“It is also a use of bitcoin as a long-term store of value, which has been our investment thesis from the beginning,” adds this manager of a cryptocurrency fund.
-Doubts
Goodfood’s initiative is also, in his opinion, a “little wink” from a company that wants to make a name for itself by being innovative.
The president and CEO of the Institute on Governance, François Dauphin, is skeptical. “It puts additional risk on shareholders. Those who bought shares did so to capitalize on the business model. Not for making investments in cryptocurrency. »
François Dauphin says he understands that the return of Donald Trump to the White House makes cryptocurrencies more attractive in the short and medium term, but given the volatility of recent years, he questions the strategy.
Investing in bitcoin is not a good idea for Goodfood in the eyes of portfolio manager Philippe Hynes of Tonus Capital. If he wants to invest in bitcoin, this investment expert says he can do it directly himself.
I don’t need the companies I invest in to speculate for me. Additionally, Goodfood does not have a balance sheet full of idle cash.
Philippe Hynes, portfolio manager
“Goodfood has an expensive convertible debenture that matures in three years and acquisition plans. I would prefer that the leaders keep the money for that,” he says.
“If I invest in Goodfood, it is because I believe that the company can increase its number of subscribers in the country, that it will have better profit margins and be more profitable,” he adds. It is these operations that will increase the value of the company, and therefore the value of the stock. »
His colleague Stephen Takacsy, portfolio manager at the firm Gestion Lester, was a shareholder of Goodfood in the past. He appears surprised.
“Bitcoin is still a speculative investment, because its value is only supported by the demand of investors willing to pay more until they no longer want to pay. And when the value falls and investors panic to sell, liquidity dries up and losses can be substantial,” he says.
Jonathan Ferrari responds that Goodfood board members own more than 30% of the company’s shares and have discussed bitcoin at length in the past year before investing to fully understand how to execute and integrate the strategy.
Bitcoin has increased in value by an average of 40% per year over the past 16 years. We believe we can create compelling value for Goodfood and differentiate ourselves from our competitors and other public companies across the country.
Jonathan Ferrari, Chairman and CEO of Goodfood
The entrepreneur points out that with Tesla in particular, Goodfood is now part of a minority of public companies in the world outside the technology sector and the cryptocurrency ecosystem to have started to invest in bitcoin.
Goodfood will present its start-of-year performance on Tuesday and hold its annual meeting of shareholders.
