Sonnet BioTherapeutics Holdings, Inc. (NASDAQ: SONN) experienced a notable increase in its shares, rising over 227% in premarket trading following a significant business merger announcement.
SONN's Business Transformation
Sonnet is abandoning its traditional drug development strategy by merging with Rorschach I LLC, with investments from Atlas Merchant Capital and Paradigm Operations LP. Upon completion, the merger will rebrand Sonnet as Hyperliquid Strategies Inc (HSI), which will own 12.6 million HYPE tokens worth approximately $583 million.
Market Reaction to the News
The announcement caused Sonnet's shares to jump 227.27% to $16.92, marking one of the most significant day-to-day percentage increases in recent biotech history. The company’s market capitalization is now approximately $16.367 million, which is modest compared to the reported $888 million transaction value.
Future of Sonnet in the Cryptocurrency Sector
Despite this shift, Sonnet will continue to operate as a biopharmaceutical company and focus on developing its leading drug candidate SON-1010. The HYPE token, as the native token of the Hyperliquid Layer-1 blockchain, is increasingly gaining traction in the cryptocurrency market and recently became the 13th largest cryptocurrency by market capitalization.
Sonnet BioTherapeutics is taking a risky yet potentially rewarding strategy by pivoting to the cryptocurrency sector, which may present new opportunities for investors and change the biotech landscape.
