Shares in Nasdaq-listed drinks maker Safety Shot tanked 50% after announcing a plan to buy $25 million worth of the Bonk memecoin as part of a new treasury strategy.
The firm announced a strategic alliance with the Bonk founding contributors on Monday to deeply integrate the company with the memecoin ecosystem.
The firm stated that its decision to focus on the memecoin as the core treasury asset “is based on its clear and distinct advantages over its competitors.”
The Solana-based token “benefits from superior technology that enables high-speed, low-cost transactions,” it stated.
It added that this gives Bonk an edge over rivals such as Shiba Inu (SHIB) and Pepe (PEPE), which are “constrained by the high fees and slower speeds” of Ethereum and Dogecoin (DOGE), which is inflationary.
Bonk is the fifth-largest memecoin by market capitalization, with $1.9 billion and 77 trillion tokens in circulation. Prices hit a peak in November 2024 but have since tanked 57% from that high as the memecoin frenzy faded over the past six months.
Safety Shot said it prepared for this move by settling all outstanding debt and maintaining over $15 million in cash. It plans to issue preferred shares at a value of $35 million which are convertible into shares of the company’s common stock.
By aligning with “one of the most exciting ecosystems in digital assets,” we are taking a bold first step in a much broader corporate evolution for our company, said Boon.
Cryptox contacted Safety Shot for more details but did not receive an immediate response.
Safety Shot stock slumps
The move failed to impress investors as company stock (SHOT) slumped more than 50% on Monday, in a fall to $0.59 in after-hours trading.
Safety Shot, formerly known as Jupiter Wellness, manufactures a blood alcohol detox drink under the brand Sure Shot. CEO Jarrett Boon was the co-founder and CEO of GBB Drink Lab, which developed Safety Shot.
Related: Traditional companies enter the crypto treasury game with BTC, XRP and SOL buys
Company shares have surged 36% over the past month but remain down 22.5% since the beginning of the year.
Not the first corporate memecoin treasury
This is not the first public firm to launch a memecoin treasury. In May, GD Culture Group, which focuses on livestreaming and e-commerce, announced plans to raise up to $300 million for a crypto treasury reserve that would include the US President’s namesake memecoin TRUMP (TRUMP).
Memecoin market capitalization has declined by 25% since the beginning of the year, while the overall crypto market cap is up 22% in the same period, according to CoinMarketCap.
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