Canada NewsWire
NEW YORK, Aug. 16, 2021
Partners' Capital decreased 11% in the quarter amidst pronounced digital asset price declines
Counterparty trading volumes grew over 90% in the quarter
Gross counterparty loan originations grew over 130% in the quarter
Assets Under Management ("AUM")1 increased 12% in the quarter
Investing in expansion through partnerships and key leadership hires
NEW YORK, Aug. 16, 2021 /CNW/ - Galaxy Digital Holdings Ltd. (TSX: GLXY) ("Galaxy Digital" the "Company" or "GDH Ltd.") today released financial results for the three and six months ended June 30, 2021 for both itself and Galaxy Digital Holdings LP (the "Partnership" or "GDH LP").
"While the second quarter included significant volatility and macro-related headwinds to near-term results, our core operating activities including providing liquidity and execution services for clients and counterparties, and our strategic investment portfolio, delivered another quarter of rapid growth consistent with the pace of adoption of the crypto economy," said Michael Novogratz, Founder and CEO of Galaxy Digital.
"Even with the broad-based digital asset market declines within the quarter, Galaxy again demonstrated strong counterparty trading volume growth and continues to add more blue-chip partnerships across the firm, most recently with Bloomberg and Goldman Sachs," Mr. Novogratz added.
Quarter-to-date Market and Company Updates, Third Quarter 2021:
______________________________ | |
1 | AUM is inclusive of sub-advised funds, committed capital closed-end vehicles, seed investments by affiliates, and fund of fund products associated with the Vision Hill acquisition. Changes in AUM are generally the result of performance, contributions, and withdrawals. |
2 | Represents coinmarketcap.com total cryptocurrency market capitalization quoted price. |
3 | Represents total value locked in DeFi according to defipulse.com. |
Select Financial Highlights for the Second Quarter 2021, compared to Second Quarter 2020
________________________________ | |
4 | Excluding non-controlling interests ("NCI"). |
5 | Represents coinmarketcap.com total cryptocurrency market capitalization quoted price. |
6 | Cash holdings reflect Cash subject to trade settlement, as of June 30, 2021 in the amount of $30 million. |
Operating Highlights for the Second Quarter 2021, compared to Second Quarter 2020
Corporate Updates
Earnings Conference Call
An investor conference call will be held today, August 16, 2021 at 8:30 AM Eastern Time. A live webcast with the ability to ask questions will be available at: https://investor.galaxydigital.io/ or directly at: http://public.viavid.com/index.php?id=145822. The conference call can also be accessed by investors in the United States or Canada by dialing 1-877-407-0789, or 1-201-689-8562 (outside the U.S. and Canada). A replay of the webcast will be available and can be accessed in the same manner as the live webcast on the Company's Investor Relations website. Through September 6, 2021, the recording will also be available by dialing 1-844-512-2921, or 1-412-317-6671 (outside the U.S. and Canada) passcode: 13721694.
About Galaxy Digital Holdings Ltd. (TSX: GLXY) ("GDH Ltd.") and Galaxy Digital Holdings LP ("GDH LP")
GDH Ltd.'s only significant asset is a minority investment in GDH LP. GDH LP is a diversified, financial services and investment management company in the digital asset, cryptocurrency and blockchain technology sector. GDH LP's multi-disciplinary team has extensive experience spanning investing, portfolio management, capital markets, operations, and blockchain technology. GDH LP operates in the following businesses: Trading, Asset Management, Principal Investments, Investment Banking and Mining. The CEO of GDH Ltd. and the general partner of GDH LP is Michael Novogratz. GDH LP is headquartered in New York City, with offices in Tokyo, Japan, London, Amsterdam, Hong Kong, Amsterdam, Netherlands, Jersey City, U.S., San Francisco, U.S., Chicago, U.S., and the Cayman Islands (registered office).
Additional information about GDH LP's businesses and products is available on www.galaxydigital.io.
This press release should be read in conjunction with (i) GDH LP's Management Discussion and Analysis and Condensed Consolidated Interim Financial Statements for the three months and six months ended June 30, 2021 and (ii) GDH Ltd.'s Management Discussion and Analysis and Condensed Consolidated Interim Financial Statements for the three months and six months ended June 30, 2021 (together, the "Consolidated Financial Statements" and "MD&As"), which have been filed on SEDAR at www.sedar.com.
Disclaimers and Additional Information
The TSX has not approved or disapproved of the information contained herein. The Ontario Securities Commission has not passed upon the merits of the disclosure record of Galaxy Digital.
The performance of the Funds will vary from the performance of their respective indices.
BLOOMBERG is a trademark or service mark of Bloomberg Finance L.P. GALAXY is a trademark of Galaxy Digital Capital Management LP (GDCM). Bloomberg Finance L.P. and its affiliates (collectively, Bloomberg) are not affiliated with GDCM, the Galaxy Funds and their respective affiliates (collectively, Galaxy). Bloomberg's association with Galaxy is to act as the administrator and calculation agent of the Indices (collectively, the "Index"), which is the property of Bloomberg. Neither Bloomberg nor Galaxy guarantee the timeliness, accurateness, or completeness of any data or information relating to the Index or results to be obtained. Neither Bloomberg nor Galaxy make any warranty, express or implied, as to the Index, any data or values relating thereto or any financial product or instrument linked to, using as a component thereof or based on the Index (Products) or results to be obtained therefrom, and expressly disclaims all warranties of merchantability and fitness for a particular purpose with respect thereto. To the maximum extent allowed by law, Bloomberg, its licensees, Galaxy, and their respective employees, contractors, agents, suppliers, and vendors shall have no liability or responsibility whatsoever for any injury or damages—whether direct, indirect, consequential, incidental, punitive, or otherwise—arising in connection with the Index, any data or values relating thereto or any Products—whether arising from their negligence or otherwise.
No Offer or Solicitation
This release shall not constitute a solicitation of a proxy, consent or authorization with respect to any securities or in respect of any of the proposed reorganization and combination with BitGo. This release is for informational purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote of approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.
Additional Information
In connection with the proposed reorganization and combination with BitGo, Galaxy will file a registration statement, including a management circular/prospectus and an information statement/prospectus, with the Securities and Exchange Commission (the "SEC"). GALAXY AND BITGO SHAREHOLDERS ARE ADVISED TO READ THE MANAGEMENT CIRCULAR/PROSPECTUS AND INFORMATION STATEMENT/PROSPECTUS, RESPECTIVELY, WHEN SUCH DOCUMENTS BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders may obtain a free copy of the registration statement and such other documents (when available) and any other relevant documents filed with the SEC from the SEC's website at http://www.sec.gov. Copies of the management circular/prospectus and an information statement/prospectus can also be obtained, when available, without charge, from Galaxy's website at https://investor.galaxydigital.io/.
CAUTION ABOUT FORWARD-LOOKING STATEMENTS
The information in this release may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and "forward-looking information" under Canadian securities laws (collectively, "forward-looking statements"). Our forward-looking statements include, but are not limited to, statements regarding our or our management team's expectations, hopes, beliefs, intentions or strategies regarding the future, including with respect to mining capacity. Statements that are not historical facts, including statements about the pending acquisition, domestication and the related transactions (the "transactions"), and the parties, perspectives and expectations, are forward-looking statements. In addition, any statements that refer to estimates, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "forecast," "intend," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this release may include, for example, statements about: our ability to complete the transactions within a particular timeframe. The forward-looking statements contained in this report are based on our current expectations and beliefs concerning future developments and their potential effects on us taking into account information currently available to us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks include, but are not limited to: (1) the occurrence of any event, change or other circumstances that could result in the failure to consummate the transactions; (2) the possibility that the terms and conditions set forth in any definitive agreements with respect to the transactions may differ materially from the terms and conditions set forth herein; (3) the outcome of any legal proceedings that may be instituted following the transactions and any definitive agreements with respect thereto; (4) the inability to complete the transactions due to the failure to satisfy conditions to closing in the definitive agreements with respect to the transactions including in respect of shareholder and stock exchange approvals; (5) changes to the proposed structure of the transactions that may be required or appropriate as a result of applicable laws or regulations or as a condition to obtaining regulatory approval of the transactions; (6) the ability to meet and maintain listing standards following the consummation of the transactions; (7) the risk that the transactions disrupts current plans and operations; (8) costs related to the transactions; (9) changes in applicable laws or regulations; (10) the possibility that the combined company may be adversely affected by other economic, business, and/or competitive factors; (11) changes or events that impact the cryptocurrency industry, including potential regulation, that are out of our control; (12) the risk that our business will not grow in line with our expectations or continue on its current trajectory; (13) the possibility that our addressable market is smaller than we have anticipated and/or that we may not gain share of it; (14) those other risks contained in the Annual Information Form for the year ended December 31, 2020 available on the Company's profile at www.sedar.com and (15) other risks and uncertainties to be indicated from time to time in filings made with the SEC. Should one or more of these risks or uncertainties materialize, they could cause our actual results to differ materially from the forward-looking statements. We are not undertaking any obligation to update or revise any forward looking statements whether as a result of new information, future events or otherwise. You should not take any statement regarding past trends or activities as a representation that the trends or activities will continue in the future. Accordingly, you should not put undue reliance on these statements.
Galaxy Digital Holdings LP's Financial Results
(in thousands) | June 30, 2021 | December 31, 2020 | |||||
Assets | |||||||
Current assets | |||||||
Cash | $ | 410,249 | $ | 135,766 | |||
Digital assets | 1,579,665 | 850,380 | |||||
Investments | 613,005 | 260,383 | |||||
Receivable for digital asset trades | 13,302 | 13,204 | |||||
Digital asset loans receivable | 163,334 | 96,724 | |||||
Digital assets receivables | 72,410 | 12,813 | |||||
Assets posted as collateral | 41,377 | 15,768 | |||||
Receivables | 21,979 | 2,710 | |||||
Due from broker | 150 | 4,452 | |||||
Derivatives | 34,329 | 15,922 | |||||
Prepaid expenses and other assets | 40,121 | 6,494 | |||||
Goodwill | 24,645 | 15,515 | |||||
Loans receivable | 110,474 | 8,510 | |||||
3,125,040 | 1,438,641 | ||||||
Digital assets receivables | 18,927 | 6,911 | |||||
Right of use asset | 4,268 | 4,573 | |||||
Property and equipment | 6,105 | 3,693 | |||||
Intangible asset | 1,971 | 2,406 | |||||
31,271 | 17,583 | ||||||
Total assets | $ | 3,156,311 | $ | 1,456,224 | |||
Liabilities | |||||||
Current liabilities | |||||||
Digital assets sold short | $ | 1,412 | $ | 5,278 | |||
Investments sold short | 10,704 | 4,384 | |||||
Warrant liability | 50,045 | 20,781 | |||||
Accounts payable and accrued liabilities | 144,039 | 34,154 | |||||
Payables to customers | 150,829 | — | |||||
Payable for digital asset trades | 54,225 | 31,144 | |||||
Digital asset loans payable | 672,723 | 226,399 | |||||
Loans Payable | 17,000 | — | |||||
Collateral payable | 197,827 | 44,660 | |||||
Lease liability | 710 | 742 | |||||
1,299,514 | 367,542 | ||||||
Lease liability | 4,375 | 4,515 | |||||
Total liabilities | 1,303,889 | 372,057 | |||||
Equity | |||||||
Partners' capital | 1,497,399 | 798,211 | |||||
Non-controlling interests | 355,023 | 285,956 | |||||
Total equity | 1,852,422 | 1,084,167 | |||||
Total liabilities and equity | $ | 3,156,311 | $ | 1,456,224 |
(in thousands) | Three months | Three months | ||||
Income | ||||||
Advisory and management fees | $ | 2,444 | $ | 1,471 | ||
Net income from digital asset mining | 987 | — | ||||
Leasing income from mining equipment | 632 | — | ||||
Net realized gain (loss) on digital assets | (161,112) | 48,517 | ||||
Net realized gain (loss) on investments | 41,363 | (4,581) | ||||
Interest income | 16,835 | 1,270 | ||||
Net derivative gain | 117,041 | 2,438 | ||||
Other income | 3,357 | — | ||||
21,547 | 49,115 | |||||
Operating expenses | ||||||
Equity based compensation | 13,548 | 3,291 | ||||
Compensation and compensation related | (11,319) | 5,810 | ||||
General and administrative | 8,290 | 2,623 | ||||
Professional fees | 11,527 | 1,368 | ||||
Profit share arrangement expense | 8,033 | — | ||||
Interest | 18,467 | 1,260 | ||||
Insurance | 504 | 382 | ||||
Director fees | 178 | 50 | ||||
(49,228) | (14,784) | |||||
Net unrealized gain (loss) on digital assets | (496,268) | (2,203) | ||||
Net unrealized gain (loss) on investments | 172,762 | 6,958 | ||||
Revaluation of warrant liability | 2,663 | — | ||||
Unrealized foreign currency gain (loss) | (918) | (392) | ||||
Realized foreign currency gain (loss) | (4) | (190) | ||||
(321,765) | 4,173 | |||||
Income (loss) for the period | $ | (349,446) | $ | 38,504 | ||
Income (loss) attributed to: | ||||||
Unit holders of the Partnership | $ | (175,834) | $ | 35,295 | ||
Non-controlling interests | (173,612) | 3,209 | ||||
$ | (349,446) | $ | 38,504 | |||
Other comprehensive income | ||||||
Foreign currency translation adjustment | $ | 17 | $ | — | ||
Comprehensive income (loss) for the period | $ | (349,429) | $ | 38,504 | ||
Comprehensive income (loss) attributed to: | ||||||
Unit holders of the Partnership | $ | (175,817) | $ | 35,295 | ||
Non-controlling interests | (173,612) | 3,209 | ||||
$ | (349,429) | $ | 38,504 |
Income and expenses by each reportable segment of GDH LP for the three months ended June 30, 2021 are as follows (in thousands):
Trading | Principal | Asset | Investment | Mining | Corporate | Totals | ||||||||||||
Advisory and | $ | 60 | $ | — | $ | 2,384 | $ | — | $ | — | $ | — | $ | 2,444 | ||||
Net income from digital | — | — | — | — | 987 | — | 987 | |||||||||||
Leasing income from | — | — | — | — | 632 | — | 632 | |||||||||||
Net realized gain on | (236,570) | (2,525) | 77,983 | — | — | — | (161,112) | |||||||||||
Net realized gain on | — | 41,363 | — | — | — | — | 41,363 | |||||||||||
Interest income | 16,816 | 19 | — | — | — | — | 16,835 | |||||||||||
Net derivative gain | 92,041 | 25,000 | — | — | — | — | 117,041 | |||||||||||
Other income | 1,220 | 2,062 | 75 | — | — | — | 3,357 | |||||||||||
(126,433) | 65,919 | 80,442 | — | 1,619 | — | 21,547 | ||||||||||||
Operating expenses | 33,746 | 1,316 | 5,794 | 336 | 618 | 7,418 | 49,228 | |||||||||||
Net unrealized gain on | (177,874) | (67,502) | (249,856) | — | (1,036) | — | (496,268) | |||||||||||
Net unrealized gain on | — | 172,762 | — | — | — | — | 172,762 | |||||||||||
Net unrealized loss on | — | — | — | — | — | 2,663 | 2,663 | |||||||||||
Unrealized foreign | (918) | — | — | — | — | — | (918) | |||||||||||
Realized foreign | (4) | — | — | — | — | — | (4) | |||||||||||
(178,796) | 105,260 | (249,856) | — | (1,036) | 2,663 | (321,765) | ||||||||||||
Net income (loss) for | $ | (338,975) | $ | 169,863 | $ | (175,208) | $ | (336) | $ | (35) | $ | (4,755) | $ | (349,446) |
Income and expenses by each reportable segment of GDH LP for the three months ended June 30, 2020 are as follows (in thousands):
Trading | Principal | Asset | Investment | Corporate | Totals | |||||||
Income (loss) | ||||||||||||
Advisory and management fees | $ | — | $ | — | $ | 1,246 | $ | 225 | $ | — | $ | 1,471 |
Net realized loss on digital assets | 48,710 | (210) | 17 | — | — | 48,517 | ||||||
Net realized gain on investments | — | (4,581) | — | — | — | (4,581) | ||||||
Interest income | 1,143 | 123 | 5 | — | 1,271 | |||||||
Net derivative gain | 2,438 | — | — | — | — | 2,438 | ||||||
52,291 | (4,668) | 1,268 | 225 | — | 49,116 | |||||||
Operating expenses | 4,810 | 789 | 3,003 | 769 | 5,413 | 14,784 | ||||||
Net unrealized gain (loss) on | (14,565) | 9,137 | 3,225 | — | — | (2,203) | ||||||
Net unrealized gain on | — | 6,958 | — | — | — | 6,958 | ||||||
Unrealized foreign currency loss | (392) | — | — | — | — | (392) | ||||||
Realized foreign currency gain | (190) | — | — | — | — | (190) | ||||||
(15,147) | 16,095 | 3,225 | — | — | 4,173 | |||||||
Net loss for the period, | $ | 32,334 | $ | 10,638 | $ | 1,490 | $ | (544) | $ | (5,413) | $ | 38,505 |
Assets and liabilities by reportable segment of GDH LP as of June 30, 2021 are as follows (in thousands):
Trading | Principal | Asset | Investment | Mining | Corporate and | Totals | ||||||||
Total assets | $ | 1,824,233 | $ | 813,923 | $ | 416,470 | $ | 6,357 | $ | 42,541 | $ | 52,787 | $ | 3,156,311 |
Total liabilities | $ | 1,131,271 | $ | 2,198 | $ | 81,169 | $ | 192 | $ | 2,012 | $ | 87,047 | $ | 1,303,889 |
Assets and liabilities by reportable segment of GDH LP as of December 31, 2020 are as follows (in thousands):
Trading | Principal | Asset | Investment | Mining | Corporate and | Totals | ||||||||
Total assets | $ | 751,138 | $ | 357,529 | $ | 307,720 | $ | 6,190 | $ | 3,633 | $ | 30,014 | $ | 1,456,224 |
Total liabilities | $ | 333,321 | $ | 101 | $ | 18,170 | $ | 22 | $ | — | $ | 20,443 | $ | 372,057 |
Select statement of financial position information
The fair value of each asset class by reporting segment of GDH LP as of June 30, 2021 is as follows (in thousands):
Trading | Principal | Asset | Investment | Mining | Corporate | Totals | ||||||||
Digital assets | $ | 1,095,246 | $ | 133,726 | $ | 348,519 | $ | — | $ | 2,174 | $ | — | $ | 1,579,665 |
Digital assets receivables | — | 91,337 | — | — | — | — | 91,337 | |||||||
Digital assets posted as | 40,977 | — | — | — | — | — | 40,977 | |||||||
Investments: | ||||||||||||||
Pre-Launch network | — | 3,138 | — | — | — | — | 3,138 | |||||||
Convertible notes | 7,032 | 7,032 | ||||||||||||
Preferred stock | — | 178,848 | — | — | — | — | 178,848 | |||||||
Common stock | 68,457 | — | — | — | — | 68,457 | ||||||||
LP/LLC interests | — | 326,283 | — | — | — | — | 326,283 | |||||||
Warrants/Trust units/Trust | 26,770 | 2,477 | — | — | — | — | 29,247 | |||||||
$ | 1,162,993 | $ | 811,298 | $ | 348,519 | $ | — | $ | 2,174 | $ | — | $ | 2,324,984 |
The fair value of each asset class by reporting segment of GDH LP as of December 31, 2020 is as follows (in thousands):
Trading | Principal | Asset | Investment | Corporate and | Totals | |||||||
Digital assets | $ | 444,216 | $ | 118,555 | $ | 287,609 | $ | — | $ | — | $ | 850,380 |
Digital assets receivables | — | 19,724 | — | — | — | 19,724 | ||||||
Digital assets posted as collateral | 15,625 | — | — | — | — | 15,625 | ||||||
Investments: | ||||||||||||
Pre-Launch network | — | 500 | — | — | — | 500 | ||||||
Convertible notes | — | 4,501 | — | — | — | 4,501 | ||||||
Preferred stock | — | 86,258 | — | — | — | 86,258 | ||||||
Common stock | — | 29,970 | — | — | — | 29,970 | ||||||
LP/LLC interests | — | 84,311 | — | — | — | 84,311 | ||||||
Warrants/Trust units/Trust shares | 51,182 | 3,661 | — | — | — | 54,843 | ||||||
$ | 511,023 | $ | 347,480 | $ | 287,609 | $ | — | $ | — | $ | 1,146,112 |
All figures are in U.S. Dollars unless otherwise noted.
SOURCE Galaxy Digital Holdings Ltd.
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