GD Culture Group Ltd. suffered a dramatic 73.3% plunge on Tuesday, closing at $0.028 per share as trading volume surged to more than 11 times the daily average. The Nasdaq-listed company, which operates in both artificial intelligence and digital assets, saw its shares continue to slide in after-hours trading, hovering around $0.032, according to Google Finance data.
The severe selloff intensifies the pressure surrounding GD Culture's outstanding $10.75 per share buyout proposal. However, the offer remains preliminary and non-binding, meaning the bidders are not obligated to proceed. The company itself has previously cautioned that there is no guarantee a definitive agreement will be reached or that the transaction will ultimately close.
No new corporate announcements appeared on GD Culture's investor relations website on Tuesday. The most recent filings date back to early May, with releases from May 6, May 5, and April 29. The May statements primarily addressed the buyout offer and the formation of a special committee to evaluate it.
On May 6, GD Culture's board established a special committee composed of three independent directors—Lei Zhang, Yun Zhang, and Shuaiheng Zhang—to review the bid from Wealthy Concord Ltd. and East Valley Technology Ltd. According to the company's earlier disclosure, these two bidders collectively held approximately 9.2% of GD Culture's shares as of April 10.
Dilution risk is another major concern for shareholders. In late April, GD Culture entered into an at-the-market (ATM) issuance agreement with Univest Securities, allowing the company to sell up to $300 million worth of its common stock into the open market at its discretion. While such programs can provide access to capital, they also dilute the holdings of existing shareholders as new shares are issued.
The company's balance sheet adds another layer of complexity for investors. GD Culture's first-quarter filing reported the fair value of its bitcoin holdings at approximately $501 million as of the end of March. The company posted a net loss of $164.1 million for the quarter, largely driven by paper losses on its digital assets. Meanwhile, the same filing revealed just $16,805 in cash and cash equivalents and a working capital deficit of roughly $1.7 million at the close of the quarter.
GD Culture's decline was far steeper than that of other companies with significant cryptocurrency exposure. Strategy Inc. fell 6.3%, Trump Media & Technology Group dropped 3.3%, and bitcoin itself slipped about 0.6% late Tuesday, according to market data.
The company has been repositioning itself as an AI content developer rather than solely a bitcoin play. In April, Chairman and CEO Xiaojian Wang described the launch of the Fato interactive novel app as a “proud and defining moment,” emphasizing the integration of AI with storytelling. However, the market remains focused on the immediate risks: the buyout offer could be rejected, revised, or abandoned; financing for the deal may prove difficult; and the ATM share sale program could continue to weigh on the stock price.
After-hours trading remains thin, which can amplify price swings. Trading sessions will continue through Friday, with Nasdaq confirming that U.S. stock markets will be closed on Thursday for the Juneteenth holiday. Unless GD Culture provides investors with updates on the buyout bid, new financing arrangements, or any share sales, the stock is expected to move primarily on order flow, with little fresh fundamental news to provide direction.
