Sister Mu and the UAE invest in Nasdaq-listed companies to transform into SOL treasury.

Author: Bao Yilong, Wall Street Journal

Famous investor Cathie Wood has teamed up with the UAE to invest $300 million in a Nasdaq-listed football company, which will transform into a treasury company specializing in accumulating Solana tokens.

On September 18, Brera Holdings, which holds shares in several football clubs from Italy to Mongolia, announced that after securing a $300 million private investment led by Abu Dhabi's Pulsar Group and ARK Invest, the company will begin accumulating Solana tokens. At the same time, the company will be renamed Solmate.

The new company plans to conduct a dual listing in the UAE, leveraging “UAE connections to enhance SOL accumulation capabilities”. After the announcement, the stock price of this Nasdaq-listed company surged by as much as 592% to $52.95, closing with an increase of 225%.

This transaction reflects the ongoing expansion of the digital asset treasury concept, but the recent performance of such companies' stock prices has become increasingly divergent, with some companies' stock prices falling below the value of the cryptocurrencies they hold, and the market is reassessing the premium on this business model.

Star Investors and Heavyweight Executives Join

To inject strong momentum into this transformation, Solmate has assembled an impressive team of executives and directors.

Marco Santori, a legal pioneer in the cryptocurrency industry, will serve as the CEO of the new company. In an interview, Santori stated that he believes Solmate's differentiated advantage lies in its ability to be close to capital, and he said:

Where is the capital of capital in today's world? It is the UAE. This is the place that initially attracted me.

Santori was previously a general partner at the blockchain investment group Pantera Capital and served as Chief Legal Officer at the cryptocurrency exchange Kraken for five years, known in the industry for creating the Simple Agreement for Future Tokens (SAFT).

More notably, economist Arthur Laffer, who is famous for proposing the “Laffer Curve” theory and was awarded the Presidential Medal of Freedom in 2019, will join the company's board of directors.

According to reports citing a person close to Brera, after Laffer confirmed his participation, Wood quickly decided to invest in Solmate. Wood has previously described Laffer as a “mentor.”

Sister Wood's entry this time has further enhanced Solmate's star aura.

The Solana “Treasury” Track is Becoming Increasingly Crowded

Despite the endorsement from heavyweight figures, Solmate will still enter an already crowded arena. Transforming public companies into “treasury companies” for specific cryptocurrencies has become a trend, especially in the Solana space.

According to reports, Santori's former employer Pantera Capital has just assisted a medical device company in raising $1.25 billion this week, which also plans to hoard SOL tokens.

Earlier, another crypto investment firm, Galaxy Digital, announced that it co-led a $1.65 billion private placement for a Solana holding company named Forward Industries alongside two other investors. Santori himself also revealed that he has recently reviewed around 80 financing proposals for treasury company projects.

To stand out in the competition, Solmate has established a deep cooperation with the Solana Foundation.

According to Santori, the Solana Foundation will sell part of its tokens to Solmate at a discounted price and gain two board seats. In return, Solmate will collaborate with the foundation on projects in the UAE and share related revenues. Santori even predicts:

I believe Wall Street will build on Solana, rather than Ethereum.

Imitating the “Coin Hoarding” Precedent, but the Market Shows Signs of Fatigue

Solmate's business model essentially emulates the successful precedent of MicroStrategy transforming into a “Bitcoin treasury company.”

By issuing stocks or bonds to accumulate cryptocurrencies, these companies aim to drive their stock prices to increase beyond the value of the cryptocurrencies they hold. According to statistics, more than 100 companies have adopted this strategy.

However, this model, once favored by the market, is facing challenges.

Some critics argue that this is nothing more than a “trick of marketing and financial engineering.” In recent weeks, the stock prices of many well-known crypto treasury companies have seen a significant decline, with some companies' market values even falling below the value of their held crypto assets, indicating that investors are reevaluating the premiums on such stocks.

A striking example is the previously mentioned Eightco Packaging Company, which announced the purchase of Worldcoin associated with OpenAI CEO Sam Altman, causing its stock price to soar 3000% in a single day, but the increase subsequently fell significantly to 714%.

It is worth noting that the brokerage Cantor Fitzgerald, controlled by the family of U.S. Secretary of Commerce Gina Raimondo, provided consulting services for the private placements of Solmate and Eightco.