After the surge: how you can invest in Bitcoin at a 40% discount

Zuzu Strategy (formerly Zuzu Power), the Israeli company that about a year ago abandoned the development of fast charging for electric vehicles and became a "treasury company" entirely focused on holding Bitcoin, has published its reports for the first half of 2026.

The reports show that it has about 1,047 Bitcoins in its coffers, purchased at a total cost of about 122 million dollars. The publication comes at a positive time for digital currencies: Bitcoin has surged by about 24% in the last week and approached 80 thousand dollars, a move that boosted the leveraged stock but is far from erasing the accumulated loss.

The financial picture is difficult. In the first half, Zuzu recorded a net loss of about 46.9 million dollars. Two engines are behind it: a "paper" loss of about 30.3 million dollars from the decline in Bitcoin value, alongside a sharp jump in administrative and general expenses to about 15.6 million dollars.

The truly interesting detail is hidden here: the vast majority of these expenses, about 13.8 million dollars, are stock-based compensation (RSU) granted to the CEO, the CFO, the chairman, and the directors. In other words, while the stock has collapsed by over 80% in the last year, the management has allocated itself a huge amount of shares that dilutes existing shareholders. On the positive side, the company has a cash balance of about 23.3 million dollars, which gives it operational breathing room.

And here is the main story. According to a Bitcoin price of about 79 thousand dollars per coin, the value of Zuzu's holding stands at about 250 million shekels. However, the stock is traded at a market value of only about 150 million shekels for the company. That is, the investor is effectively buying Bitcoin at a "discount" of about 40%: one shekel of Bitcoin for about 60 agorot. This is a phenomenon completely opposite to that of the American Strategy (formerly MicroStrategy), which traded at a premium to its holdings.

The reasons for the gap are clear. First, the company is burning cash and recording operating losses, so the value backing each share erodes over time. Second, the dilution: the company has an at-the-market (ATM) offering prospectus of up to one billion dollars, and issuing shares below asset value only destroys value.

Third, strategic uncertainty: Zuzu has already changed its identity twice and now declares that it is "exploring alternatives," and the market prices in uncertainty at a discount. And fourth, today there are cleaner and cheaper ways to get exposure to Bitcoin, such as ETFs on the currency, and therefore investors demand a discount as compensation for the company's additional risks.

For those who believe in Bitcoin, the discount can be an opportunity. If the currency rises and the gap also closes, the investor will enjoy a double leverage. In addition, if the management ever releases value, for example through selling the coins or a buyback, the gap might narrow.

The problem is that there is no mechanism that forces the discount to close, and it could continue for years or even widen. At the same time, the dilution and cash burn continue to erode the Bitcoin behind each share. And most importantly: the leverage works in both directions. In the past, a drop of only 7% in Bitcoin caused the stock to fall by 45% in one day. A drop in the currency along with a widening of the discount is a destructive combination.

The surge in Bitcoin has reduced the loss on the position from about 50% at the June low to about 32% today, but the position is still deep in the red. Whoever buys here is not purchasing a technology company or a stable business, but a double-leveraged bet: on the price of Bitcoin and on the closing of the discount, through management that has already made mistakes in the past. It is a bet that can pay off big, but at the same time could also lead to heavy losses.