Shares of Safety Shot plunged by 50% following the announcement of a $25 million purchase of the Bonk memecoin, part of a new treasury strategy.
Safety Shot Treasury Strategy
The Safety Shot team announced a strategic alliance with Bonk's founders to deeply integrate into the memecoin ecosystem. The decision to focus on Bonk as the core treasury asset was based on its 'clear and distinct advantages over its competitors.' The company highlighted the speed and low-cost transactions that give Bonk an edge over rivals like Shiba Inu and Dogecoin.
Investor Reaction
The company's management failed to convince investors as Safety Shot shares fell more than 50%, dropping to $0.59 in after-hours trading. However, the stock surged 36% over the past month but remains down 22.5% since the beginning of the year.
Memecoins in Corporate Treasuries
Safety Shot is not the first public company to introduce a memecoin into its treasury. In May, GD Culture Group announced plans to create a $300 million crypto reserve, including the TRUMP memecoin. Meanwhile, the memecoin market capitalization has declined by 25% since the beginning of the year, while the overall crypto market cap has risen by 22% during the same period.
Safety Shot's decision to acquire Bonk reflects a growing trend among public companies to explore and incorporate memecoins into their financial strategies, despite the uncertainties and risks involved.
