The price of solana (SOL-USD) soared Monday as a Florida real estate data company announced that it had acquired nearly 1 million units of the world's sixth-largest cryptocurrency, yet another sign that a strategy of adding digital assets to corporate balance sheets is proliferating.
Nasdaq-listed DeFi Development Corporation (DFDV), based in Boca Raton, Fla., said it now holds 999,999 units of SOL, the token used to power the Solana blockchain.
Between July 14 and July 20, it acquired 141,383 of SOL, roughly $19 million worth, at an average price of $133.53.
The company also said it raised approximately $19.2 million in net proceeds through an equity line of credit facility by issuing 740,000 shares of common stock, according to a Monday press release.
DeFi Development Corporation’s stock fell more than 3% by market close on Monday. The stock is still 34 times higher than its opening price of $0.67 at the beginning of the year.
DFDV is among more than 150 publicly traded companies that have pivoted to a so-called crypto treasury strategy where all capital allocation efforts hinge on issuing a mix of debt and equity to acquire as much crypto as possible.
The technique was pioneered by Michal Saylor's Strategy (MSTR), formerly MicroStrategy. Starting in 2020, Saylor turned his business intelligence software firm into a bitcoin juggernaut by adding as much of the world's largest cryptocurrency to his company's balance sheet as possible.
Companies piling into this blueprint with bitcoin include video game retailer GameStop (GME) and the president’s namesake media firm Trump Media (DJT), which announced Monday that it had acquired bitcoin worth $2 billion.
There are also others, including BitMine Immersion Technologies (BMNR) chaired by Fundstrat's Tom Lee, that are taking the same approach with ether (ETH-USD), the world’s second largest cryptocurrency.
So far, many of these endeavors have proven to lead to wild stock jumps that far exceed the market value of the crypto these companies hold.
Short sellers see plenty of reasons to be skeptical about how long such a dynamic can last.
Unlike bitcoin, which from its outset has a supply of 21 million coins, SOL has no maximum supply.
David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance. His email is [email protected].
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