What Happened?
Canadian e-cigarette company CEA plans to raise $1.25 billion to establish a BNB reserve, allowing institutions and retail investors to indirectly invest in BNB through stocks, attracting significant market attention.
Following the announcement, CEA’s stock price skyrocketed to $82.88 during intraday trading, with a single-day peak increase of 833%. The company also announced a partnership with 10X Capital and YZi Labs, with the 10X team joining the company to take over management.
As more companies incorporate cryptocurrency assets into their financial reports, CEA joins the ranks of those establishing BNB reserves, stepping out of the competitive e-cigarette industry to attract capital and attention.
CEA Announces Establishment of the World’s Largest BNB Reserve
Recently, CEA Industries, a Canadian e-cigarette company, announced its entry into the cryptocurrency market, with its stock price soaring by over 800% in just one day, reminiscent of meme coin surges. CEA Industries Inc. (stock code: VAPE) primarily engages in the sale of nicotine e-cigarettes. On Monday, the company announced a strategic transformation into a publicly listed company aiming to create the world’s largest BNB reserve, igniting speculative market sentiment.
According to the company’s statement, CEA intends to raise up to $1.25 billion through a financing method known as PIPE (Private Investment in Public Equity), allowing private investors to purchase stock in a publicly listed company, to establish a U.S.-listed company dedicated to holding BNB. BNB is a token launched by Binance, the largest cryptocurrency exchange globally, with a total market capitalization of approximately $116.3 billion.
In this fundraising plan, CEA will initially secure $500 million, which includes $400 million in cash and $100 million in cryptocurrency assets. Subsequently, if investors are willing to exercise their warrants (a right to buy stocks at a favorable price in the future), CEA could have the opportunity to raise an additional $750 million in cash. All these funds will be used to purchase BNB, with the goal of transforming CEA into a platform where both institutions and retail investors can indirectly participate in BNB asset investment through stocks.
Stock Price Soars Over 800% in a Day
In addition to the transformation, CEA also announced a collaboration with investment firm 10X Capital and YZi Labs, which claims to be associated with Binance co-founder Changpeng Zhao’s family office, to jointly create this BNB reserve. Notably, several senior executives from 10X Capital will also join CEA’s management, demonstrating a strong intent for resource integration. The new CEO of CEA will be David Namdar, a senior partner at 10X Capital, who stated: “The BNB chain is one of the most widely used blockchain ecosystems globally, yet institutional investors have found it challenging to enter. We are providing traditional investors with a transparent channel to participate in the BNB ecosystem through a U.S.-listed treasury institution, marking an important step in bridging digital assets with mainstream capital markets.”
According to foreign media reports, CEA plans to continue increasing its BNB holdings over the next two years through at-the-market offerings and other strategies, while generating revenue through staking and lending.
After the announcement, CEA’s stock price surged from $8.88 last Friday to a peak of $82.88 on Monday, an increase of up to 833%, closing at $57.59, still reflecting a daily increase of 549%. Although post-market trading saw a slight decline to $53.61, the overall upward trend remains astonishing.
Cryptocurrency Reserves as a New Corporate Strategy
More and more publicly listed companies are incorporating cryptocurrencies into their balance sheets, including Trump Media & Technology Group’s significant purchase of Bitcoin and related assets, and early Bitcoin investment strategies, which have seen stock prices soar due to long-term holdings, setting a benchmark for corporate cryptocurrency reserves.
CEA’s transformation is a continuation of this trend. As the prices of mainstream assets such as Bitcoin and Ethereum reach new highs, BNB has also attracted market attention. BNB, being the core token of the Binance ecosystem, boasts mature trading fee discounts, on-chain applications, and DeFi operations, forming a unique economic circle.
According to a June 2024 report by Forbes, Zhao Changpeng and Binance control a total of 71% of the circulating supply of BNB; Zhao himself revealed in February that 98.5% of his cryptocurrency asset investments are in BNB, highlighting his optimism about BNB’s value.
Rather than battling in the fiercely competitive e-cigarette industry, CEA is leveraging the cryptocurrency and BNB surge to reshape its valuation logic and market imagination.
This also explains why many investors are willing to chase prices, with some market participants suggesting that these types of cryptocurrency treasury concept stocks could potentially become alternative targets similar to ETFs, allowing investors unable to purchase cryptocurrencies directly to participate in the market.
Source: Business Insider, Cointelegraph