Bullish Rallied 15%, Still Trades a Third Below Its Own Deal Price

Because the stock consideration for Equiniti is fixed at $38.4797 a share and the share count locked at 61.1mn, the price of BLSH between now and January decides how much the seller actually receives, and the seller has no contractual protection either way. That is the frame Thursday's numbers need to be read through, and it is the reason the loss in the headline matters less than two lines buried in the announcement.

The loss is not the story, twice over

Bullish reported a $280mn net loss. Its filing puts $245mn of that in a single line: change in fair value of digital assets held.

Bullish operates as a full-reserve exchange, holding inventory of the assets it lists so it can quote prices to clients. IFRS requires that inventory to be marked through the income statement each quarter. Bitcoin (BTC) averaged $71,700 over the period against $98,500 a year earlier and ended June at $58,539. The writedown followed mechanically. The same accounting produced a $108mn profit in the second quarter of 2025 when prices were rising.

It also cuts the other way this time. The loss more than halved from $605mn in the first quarter, and loss per share improved to $1.78 from $3.85. Stripping the markdown and related fair-value items out, adjusted net income was $14mn, or $0.09 a diluted share, against a $6mn adjusted loss a year earlier. Adjusted revenue rose 62% year-on-year to $93mn, and adjusted EBITDA more than tripled to $30mn.

Bullish is not alone. Gemini reported a $107.7mn net loss for the same quarter, and Payward, the parent of Kraken, saw its adjusted EBITDA margin fall from 24% for 2025 to roughly 4% across the first half of 2026. Industry-wide, crypto revenue fell 23% year-on-year to $47bn in the first half, according to research firm 1kx.

Why the share price is a deal term

Bullish is issuing 61.1mn new shares to Siris, the US private equity owner of Equiniti, at a price fixed in May from a 30-day pre-signing average. There is no collar, no floor and no price-based right to walk away, and the merger agreement's definition of a material adverse effect expressly excludes any fall in Bullish's share price, as reported on Wednesday from the agreements furnished to the US Securities and Exchange Commission (SEC).

Two consequences follow. Dilution to existing holders is locked at about 38% whatever the stock does. And the market value of what Siris receives floats entirely.

At Wednesday's $24.63 close those 61.1mn shares were worth about $1.51bn against the $2.35bn of stock consideration announced in May, a shortfall of roughly $846mn. Thursday's spike to $28.27 restored about $222mn of that. By 16:00UTC, with the stock at $26.14, about $92mn of the restoration remained, and the gap stood near $754mn. Including the $1.85bn of debt to be assumed at close, Bullish is paying around $3.45bn of value for a business it announced at $4.2bn.

At $26.14, on the roughly 160mn fully diluted shares implied by the company's own sensitivity table, Bullish's market value is about $4.2bn. It is buying a company priced at the same figure as itself.

The release was faded, the open was not

The sequence matters because it says what the market was actually responding to.

Bullish published results at 10:45UTC. The shares rose to $26.09 in pre-market trading and gave the entire move back within the hour, printing $24.94 by 12:00UTC. The earnings call opened at 12:30UTC. At the New York open, 13:30UTC, the stock traded down to $24.15, below Wednesday's close. Only then did it run, reaching an intra-day high of $28.27 during the morning before fading to $26.14, giving back close to 60% of the gain.

Every figure in the release, including the record subscription revenue most coverage credited for the rally, had been public for nearly three hours before the move began. The market read it and did almost nothing. Without intra-day volume for the opening stretch, it is not possible to say how broadly the later buying was distributed, but a move that arrives after the release has been digested and unwinds inside the morning is weak evidence for a durable re-rating.

What the quarter did to the deal model

The results did contain something that changes the arithmetic of the acquisition, and it is not in the press release.

Bullish's own deal materials, filed as exhibits to the May Form 6-K, footnote the transaction-revenue line in their projections as the first quarter's result annualized. That was $38mn a quarter, or $152mn a year. Second-quarter adjusted transaction revenue came in at $30mn, down 21% sequentially, which annualizes to $120mn. The run rate underpinning Bullish's own model for the combined company is now 21% stale, and the deterioration is continuing: Bullish traded $31bn of total volume in July, down 40% from $51bn in June and the weakest of the 13 months it discloses.

Average daily spot volume fell to $1.25bn in the quarter from $1.95bn three months earlier. Digital asset sales, the gross measure of what changes hands, dropped 44% year-on-year to $33bn.

The same materials put Bullish's standalone 2026 base case at $165mn of EBITDA less capital expenditure. First-half adjusted EBITDA was $65mn, before capital expenditure, or 39% of that full-year figure, with guidance implying a broadly flat second half on subscription revenue and no guidance at all on trading.

Costs are being taken out against it. Second-quarter adjusted operating expenses of $63mn were the year's peak, inflated by $2.5mn of one-off compensation and the costs of Consensus Miami, the annual conference run by CoinDesk, the media business Bullish owns. The event is named for the consensus mechanism, the process by which a blockchain network agrees on the state of its ledger. Headcount fell to 394 from 405. CFO David Bonanno said further reductions had already been made in the third quarter, and corrected an analyst who described the narrowed full-year guidance as an increase: the midpoint is unchanged, at $225mn to $245mn for subscription, services and other revenue. Net liquid assets stood at $2.1bn, down 27% from $2.86bn at the end of 2025.

The cushion is levered to the same risk

Subscription, services and other revenue reached a record $63mn, roughly two-thirds of adjusted revenue, and that is the figure the company wants read as insulation.

It is worth being precise about what sits inside it. Index revenue scales with assets in products tracking CoinDesk indices, which scale with crypto prices. CEO Tom Farley conceded on the call that a softer price environment had held total index revenue back even as Bullish won new mandates. Liquidity services are priced off client balances and yield. Consensus sponsorship is discretionary industry marketing spend, sold to firms whose budgets track the same cycle. Interest income accrues on the company's own cash and stablecoins.

"Recurring" describes the contractual form of this revenue rather than its independence from the price of Bitcoin.

Nobody on the call asked about the price

Eight analysts questioned Bullish over roughly 45 minutes. None raised the fixed consideration price, the 38% dilution or the shortfall against the announced deal value, and the company did not address them in prepared remarks. The questions ran instead to the tokenization pipeline, US derivatives access, the cost run rate and the media business.

Sandmark put detailed questions to Bullish on 10 Aug and to Siris on 12 Aug, by email and telephone, covering the pricing structure, the board arrangements and the retained Equiniti businesses, and put further questions to both companies after Thursday's results. A senior Bullish representative undertook to provide answers, but none were received. Neither company had responded to any of the questions at the time of publication. This article will be updated with any response.

The dates that will settle the argument

Equiniti is a transfer agent, the regulated intermediary that keeps the legal record of who owns a listed company's shares. Bullish's argument is that a token recorded on that register is the share itself rather than a claim on one held elsewhere, which is the only version that lets the issuing company control the process and capture the economics. The first working example is its own stock: Bullish said several market participants traded its tokenized shares on Wednesday, settled against a dollar stablecoin, its first trades in any tokenized security.

Antitrust clearance is secured in the US, UK and Germany. Other regulatory approvals are pending, including from the UK's Financial Conduct Authority, along with investment-screening clearances. Bullish targets completion in January 2027, weeks before the agreement's first termination date of 4 Feb 2027, which extends automatically while regulatory conditions remain open. Management does not expect tokenized equities to contribute materially to transaction revenue before 2027.

Three things will test the thesis before then. Bullish shows the platform at the New York Stock Exchange on 27 Oct, naming issuers and blockchain partners for the first time. The SEC's innovation exemption for tokenized securities, already delayed more than once, may arrive. And third-quarter volumes will show whether July was a floor.

Coinbase (COIN) reached a version of the same juncture in July when weak trading overshadowed its diversification push. Coinbase is not simultaneously issuing 38% of itself at a price struck three months ago.