Safety Shot, Inc. has announced a significant shift in its business strategy by partnering with the founders of the BONK memecoin.
Details of the partnership
As part of the deal, Safety Shot will receive $25 million worth of BONK tokens and will issue $35 million worth of preferred shares that can be converted into common stock. Before this move, Safety Shot cleared all its debt and currently holds over $15 million in cash. Dominari Securities, LLC is serving as Safety Shot's sole financial advisor.
Advantages of BONK
The company states that BONK, which runs on the Solana blockchain, has advantages over rival memecoins like Shiba Inu, Pepe, and Dogecoin. Solana offers faster and cheaper transactions, and BONK also operates with a deflationary system that burns tokens to increase scarcity. Currently, BONK has a market cap of nearly $2 billion and over 980,000 holders.
Shareholder reaction and memecoin market
Despite the significance of the move, shareholders reacted negatively: following the announcement, Safety Shot's stock price plummeted over 50% to $0.56 in after-hours trading. This decline comes despite shares gaining 14% over the past month. Other public companies have also started to experiment with memecoin holdings, including GD Culture Group, which announced plans to raise $300 million for a crypto reserve that includes the TRUMP memecoin.
The partnership between Safety Shot and BONK raises questions about the future of memecoins in corporate financial strategies. Despite current challenges in the memecoin market, such moves could influence the future development of both the company and the market itself.
