Publicly traded consumer products firm Upexi made a strategic decision to create a digital assets treasury in April, raising $100 million to buy Solana, promptly sending its share price skyrocketing.
Now months later, the firm is raising another $200 million in part to acquire more SOL, the native token of the layer-1 network its Chief Strategy Officer Brian Rudick told Decrypt is the “end-game winning, high performance blockchain.”
“Solana is one of the first second-generation high-performance blockchains, so it benefits from having both best-in-class performance via newer blockchain technologies like parallel transaction processing, but also large network effects from having launched in 2020,” Rudick said, highlighting Solana’s robust ecosystem of users, developers, and apps spanning the DeFi, DePIN, and AI sectors.
UPXI is up big again Wednesday, rising nearly 39% to $7.24 and pushing its weekly gain to 65%. Solana (SOL) has jumped nearly 7% on the day to $173. Earlier Wednesday, Solana hit its highest price in more than a month.
Upon the closing of its latest fundraising rounds, Upexi anticipates having approximately 1.65 million SOL in its treasury, which would make it the largest publicly traded Solana treasury with a value of around $284 million, based on today’s Solana price.
“Our business model is to grow Solana per share via multiple value accrual mechanisms, most notably accretive capital raises,” said Rudick. “So with the stock trading at a premium to book value, strong investor appetite for a successful offering, and a general view that the price of SOL will increase over time—making more near-term purchases preferable—it made sense to move forward with the fundraise.”
According to Rudick, the firm has taken some inspiration from Strategy’s (formerly MicroStrategy) accumulation playbook—one that’s helped the Bitcoin treasury company amass a haul of more than 600,000 Bitcoin, valued above $71 billion.
However, Upexi is taking advantage of Solana’s proof-of-stake architecture to be more proactive—and perhaps less risky—than some other treasury vehicles.
“MicroStrategy provided the blueprint for a digital asset treasury company,” he said. “That said, Upexi is underpinned by a pre-mined, proof-of-stake network in Solana, which enables additional value accrual mechanisms for Upexi and its shareholders.”
For Upexi, that means staking its treasury assets to earn yield, and buying locked SOL at a discount to notch gains for its shareholders.
“Upexi aims to increase shareholder value, but in a risk-prudent manner,” said Rudick. “This means we will not take on too much leverage, we will not engage in on-chain degen activity that may heighten smart contract, liquidation, and regulatory risk, and we utilize best operational practices such as diversifying amongst qualified custodians only.”
“We believe that this will not only position us well to weather all market environments,” he added, “but also is a strategy that resonates well with both crypto and traditional investors alike.”
Thus far, investors have liked the plans outlined by Upexi, as evidenced by UPXI jumping by more than 100% over the past six months.
As more and more crypto treasury vehicles pop up, the firm remains steadfast in its plans.
“Our conviction in our crypto strategy has not changed,” Rudick told Decrypt. “As digital asset legislation passes in the U.S. and more institutions move into the space, Solana and Upexi are extremely well positioned to be key beneficiaries.”
