When you hear that market cap is very important in crypto investing, Femi Otedola’s recent takeover of First Bank through available market share acquisition is one of the clearest and most functional examples that can demonstrate that important to you. Let me show you how.
Nairametrics just reported that Otedola has now succeeded in purchasing over 5% of all 34.7 billion circulating supply of First Bank Nigeria Holdings shares, meaning that he now owns more than 1.7 billion units of the company’s available shares supply.

No other owner of First Bank shares owns [even] nearly up to 5% of that available supply, so this makes Otedola the new majority shareholder of the company and set to take over its chairmanship position.

Shares represent units of ownership of a company. So, whoever owns the highest number of a company’s available shares naturally becomes its majority shareholder and most powerful personality. And with that power, they can make critical decisions impacting the leadership and direction of the company. They do this by using the heavyweight of the vote their large number of shares confers upon them, compared to the lesser weight of others. Anyways, this is not what this article is about, so let me focus.

The market cap of an asset describes how much value an asset carries in the open market. It describes what an asset class is worth in a market, or to the economy. And it reflects how much market value is being held by investors using that asset as a vehicle. Mathematically, it is what you get when you multiply the current price of the asset with how much of it that is already in the investor’s hands and available for trading.

In order to own an asset, you’ll have to pay the current value of it in money (or other preferred substitutes) to its current owner. That is how purchases of all kinds are made. And herein is the lesson that Femi Otedola’s action teaches crypto investors about being an early investor in a viable asset class.

Those who bought First Bank shares earlier probably bought it for N7.55 and less, and it’s market cap increased to about ₦271 billion consequently as at September this year. But now, those same shares are worth about ₦12.10 each due to Otedola’s purchase of massive quantities of the share units, further increasing the market valuation to the current ₦434.33 billion. As we all know, more demand increases the price of a trading asset. Hence, this means that early investors have now earned about ₦163.32 billion in capital investment gains within barely one month.

So, essentially, Otedola has just paid early FBNH investors about 70% of their individual holdings in order to purchase the highest percentage ownership of the bank. And if he or any other person purchases any more, that 70% number will increase further.

Remember, both old shareholders and new shareholders (like Otedola) are all part-owners of FBNH as an asset class. But Otedola now happens to be the highest percentage owner. In other words, he is now the most powerful decision-maker at FBNH. But for him to amass that much power, he had to first reward older investors with more monetary value to the tune of 70% of their individual holdings. This is to tell you that at all levels, sales happen.

However, on the flip side, the older investors are now at the mercy of Mr. Otedola right now as well. Should he decide to sell his heavy bag of FBNH shares, he will crash the price and can trigger a ripple sell-off effect that will also result in a further crash in the asset’s market price and value as well. And such an action could erase more than 70% of each individual shareholder’s bag, putting many of them in a loss position.

By his action, Mr. Otedola is now set to take over the leadership of the company and set the tone and direction of its policies. get more at

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