Worksport (WKSP), a tiny Nasdaq-listed maker of covers for pickup truck beds, has added its own twist to the newly popular corporate strategy of buying bitcoin that was introduced and made famous by Michael Saylor’s MicroStrategy (MSTR).
Story continues below
The New York-based company, which has a $20 million market capitalization, is investing up to 10% of its cash reserves into bitcoin (BTC) and also Ripple’s native cryptocurrency, XRP (XRP). At present, that equates to up to $5 million.
This shift is intended to protect the company’s assets against inflation and to enhance transaction efficiency, the company said.
Since Donald Trump’s election a month ago, at least a dozen other companies have announced they plan to stash extra cash in bitcoin. But Worksport’s embrace of XRP, the third-largest cryptocurrency by market cap, is different.
“I think that XRP is becoming a much more stabilized currency and asset and […] while I think that over the next little while, it’ll be volatile like most assets are, we think that it’ll be stable enough and bring value enough for us to build parts in cash there and enjoy some upside potential,” Steven Rossi, founder and CEO of Worksport, said during an interview.
Rossi has personally invested in XRP for a few years, he told CoinDesk, and believes that it is crucial for businesses to own decentralized assets.
“When I saw my wallet and I saw that XRP has been doing quite well recently, I was pleasantly surprised, and it reaffirmed that … these [are] early assets that really challenge central banking,” he said.
Many companies that have previously announced plans to diversify their Treasury reserves have seen their stock rally shortly after — even before they spend a dime on bitcoin.
Worksport’s stock price has fallen 65% over the past five years.
“The market for small issuers like us has been kind of a lagger,” Rossi said. “We obviously expect the market to react as it will positively or negatively […] but as a cash-generating business like us … we’re less reliant on stock price for survival like some issuers.”
