Sol Strategies Buys Cogent Crypto Solana Validator Assets in $206M Stock-Cash Deal

QUICK TAKES

• Sol Strategies recently purchased four of Cogent Crypto's Solana validator assets for $206M.
• Such acquisitions accelerated the holding firm's validation commission earnings and staking capabilities, boosting its ranking by 91 spots.
• Although its stocks recently dropped by 29.4%, $HODL and $CYFRF have significantly stabilized in recent days.

Solana-focused publicly traded holding firm Sol Strategies recently snapped up four Solana validator assets from Cogent Crypto in a $206M stock-cash deal.

Cogent is one of the top-performing Solana validators. It has a 99% success rate in blockchain slot inclusion. However, it's got to watch out for Jupiter, which is in close proximity with a 98% hit rate.

It's Solana's 100th-ranked validator, owing to having 699K+ staked. Sol Strategies was in the 174th position. However, following the strategic acquisition, it's since jumped to the 83rd spot.

The purchase boosted the amount of $SOL delegated to its validators, rising from 699,012 $SOL (CAD $210.5M) to 948.804 $SOL (CAD $285.8M) - an impressive 35.74% rise.

Its shares were recently paused at $1.20. But once trading resumes, they're poised to spike significantly.

Sol Strategies Eyes Other Major Validators

Solana is the second most popular blockchain network in terms of transaction volume, trailing behind Ethereum.Its affordability and efficiency make it the go-to network for many cryptocurrencies - especially meme coins.

Despite its name, Sol Strategies is to buy assets from three other validators - Sui, Monad, and Arch - totaling delegations of CAD $181.4M.

These validators are miners' of the consensus mechanism Proof-of-Stake (PoS). They verify transactions to ensure the blockchain network's health and trustworthiness. In return, they reap staking rewards.

Ultimately, the goal of the initial acquisition is to support DeFi and propel the firm's sustainability for shareholders.

This acquisition will meaningfully expand Sol Strategies' staking capabilities, which underpins Solana's reputation as a next-generation blockchain for institutional and decentralized applications alike.

- Sol Strategies CEO, Leah Wald

As part of the deal, the trading holding firm will pay $1M cash and issue 1,162K common shares valued at $1.20 apiece.

$HODL/$CYRF Rapidly Drops & Rises

Although Sol Strategies' share price recently took a turn for the worse, its floor price now hovers around the $1.10 to $1.20 mark in the Canadian market.

The stock trades under the ticker $HODL on the Canadian Securities Exchange (CSE) and is classified as $CYRF in the US.

$HODL and $CYRF's value jumped in anticipation of a Trump victory owing to the president's pro-crypto stance. However, it abruptly slumped on election day (November 6).

The company's most dominant shareholder, Chairman Antanas Guoga (otherwise known as TongG), sold an astounding 4M shares, reducing his stake from 36% to 33%.

The sale was linked to last week's announcement of a $10M revolving credit. TongG sold the shares to help raise the necessary capital.

Per System for Electronic Disclosure by Insiders (SEDI), his stock sales took place between October 31 and November 6.

Source: CEO.CA

Though a far cry from being a no vote of confidence in the firm, some industry insiders perceived it in that light and began selling the stocks near-instantly.

The impact of these disposals was harsh. $HODL's value plummeted by 29.4%, from $1.70 to $1.20.

By November 7, the chairman's holdings dropped to 47,777,067 shares of a total capitalization of 145.96M shares.

Source: CEO.CA

Short sellers had a field day, holding short interests of 3.15% (on the CSE, short interests of less than 10% are deemed healthy).

In hindsight, the bearish bias was a key signal of volatility in the US market yesterday. Coinbase, MicroStrategy, and Riot's stocks also dropped rapidly despite $BTC trading above $93K at one point.

Bulls can't have it both ways. As capital rapidly flows into crypto stocks, seeking substantial returns, volatility is anticipated.

Nonetheless, Sol Strategies has appreciated 990% over the past year - it's no wonder TonyG still recognizes the stock's potential.

On November 11, the chairman furiously acquired 500K $HODL and $CYFRF shares, followed by an extra ~$1.57M worth the following days.

Source: SEDI

His renewed interest in the company has strengthened his stake and stabilized the stock's value; during intraday trading, $HODL spiked from a $1.06 low to a $1.20 high.

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