CEA Industries (VAPE) saw its stock rise an incredible 550% on July 28 after the Canadian vape company announced plans to adopt a crypto treasury strategy.
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Taking a page from serial Bitcoin (BTC) acquirer Strategy (MSTR), CEA Industries said that it plans to acquire cryptocurrencies and hold them on its balance sheet. However, rather than purchase BTC, CEA Industries plans to accumulate Binance Coin (BNB), the fourth largest cryptocurrency by market cap, excluding dollar-pegged stablecoins.
News of the crypto strategy led CEA Industries’ stock, which trades on the Nasdaq (NDAQ) exchange in the U.S., to close up 550% at $57.58 per share. At one point, VAPE stock was up 800% on July 28. Analysts were quick to call the big move evidence of speculative frenzy surrounding crypto and meme stocks. In early trading on July 29, VAPE stock is down 17% and trading at $47.55 a share.
Crypto Trend
CEA Industries said it plans to offer a $500 million private placement to raise proceeds that will allow it to buy Binance Coin for its corporate treasury. The vape company is the latest to adopt the Strategy playbook of using debt financing and equity sales to buy crypto and hold it on its balance sheet to try and increase shareholder returns.
With the benchmark S&P 500 at a record high, the resurgence of meme stocks, and a pro-crypto U.S. president, retail investors are taking on more risk in hopes of bigger returns, say analysts. Other companies that have adopted a crypto treasury strategy include video game retailer and original meme stock GameStop (GME), as well as SharpLink Gaming (SBET) and DeFi Development Corp. (DFDV).
Is VAPE Stock a Buy?
Not enough analysts cover CEA Industries’ stock. So instead, we’ll look at the company’s three-month performance. As one can see in the chart below, VAPE stock has risen an astounding 672.95% in the last 12 weeks.
