CEA Industries (VAPE) saw its stock rise an astounding 550% on July 28 after the Canadian vape company announced plans to adopt a crypto treasury strategy.
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 Bitcoin, CEA Industries plans to accumulate Binance Coin (BNB), the fourth largest crypto by market cap, excluding dollar-pegged stablecoins.
News of the crypto strategy led CEA Industries’ stock, which trades on the Nasdaq exchange in the U.S., to close up 550% at $57.58 U.S. per share.
At one point, VAPE stock was up 800% on July 28. Analysts were quick to call the big move in the share price evidence of speculative frenzy surrounding crypto and meme stocks.
CEA Industries said it plans to offer a $500 million U.S. 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 MicroStrategy playbook of using debt financing and equity sales to buy crypto and hold it on its balance sheet to try to 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 also 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).
CEA Industries’ stock is now up 630% this year.
