Biotech company Sonnet shifts its focus to a crypto-based treasury strategy through an $888 million agreement involving HYPE tokens.
In a surprising turn of events, Sonnet BioTherapeutics (Nasdaq: SONN) is restructuring its business model to become a cryptocurrency treasury company, named Hyperliquid Strategies Inc. (HSI). This transformation is led by prominent crypto investors including Atlas Merchant Capital, Paradigm Operations, Galaxy Digital, Pantera Capital, and Bob Diamond, co-founder and CEO of Atlas Merchant Capital, who will serve as chairman of the new entity.
The transaction involves the acquisition of approximately 12.6 million HYPE tokens worth around $583 million at current prices and $305 million in cash reserves, totaling about $888 million in digital marketing assets. Hyperliquid, a blockchain platform, represents a truly differentiated offering within the digital asset space, according to Bob Diamond.
The new entity, HSI, is expected to focus on accumulating HYPE tokens from the Hyperliquid blockchain. The Hyperliquid platform supports approximately 200,000 orders per second, making it a significant player in the digital asset space. The company plans to integrate HYPE into its treasury management strategy, with the $305 million in cash proceeds enabling further HYPE accumulation.
The restructuring aims to fill the gap in the United States for institutional demand for homeland exposure, as the native token HYPE is difficult to access in the United States. David Schamis, Atlas's CIO and co-founder, will become CEO of HSI.
Existing Sonnet shareholders will retain just 1.2% of the combined company, while new crypto investors will control 98.8%. The transaction includes advisory agreements with Rorschach to help expand HSI's operations and maximize HYPE integration opportunities.
The Hyperliquid transformation highlights the speculative fervor surrounding alternative cryptocurrencies. The Hyperliquid platform's native HYPE token has surged to become the 13th-largest cryptocurrency by market cap. Sonnet stock rose to a high of $14.94 on Monday, though it has since settled at $9.10.
This restructuring marks a significant shift for Sonnet BioTherapeutics, as they abandon their proprietary FHAB (Fully Human Albumin Binding) cancer treatment platform. The company is simultaneously raising $5.5 million through a private placement of convertible preferred stock and warrants.
This news underscores the growing interest in the cryptocurrency sector and the potential for digital assets to disrupt traditional industries. As HSI moves forward, it will be interesting to see how the company leverages its significant HYPE token holdings and the expertise of its investor base to drive growth and innovation in the digital asset space.
