Author: Wenser, Odaily
Reprint: White55, Mars Finance
No one expected that the 'holding strategy', which has long been regarded as a standard by listed companies, would fail for the first time—according to SEC documents, US-listed BNB Treasury Company Windtree Therapeutics (WINT) received notice on August 19 that its stock price has been below $1 for too long, after multiple reverse splits and failing to meet the usual grace period, its common stock will be delisted from the Nasdaq Capital Market on August 21 and transferred to OTC market trading.
Affected by this news, WINT's stock price fell by 77.21%, currently reported at $0.11, which has dropped more than 99.98% from over $517 a year ago, and compared to its peak price of $567,000 per share at the beginning of its listing in 2020, it is even more tragic.
It is noteworthy that the company announced in July the establishment of a BNB strategic reserve, and the stock price once rose to $1.28, but due to long-term depressed stock prices and the emergence of concept stocks such as 'BNB Treasury Company CEA' supported by Binance, it ultimately could not escape the fate of delisting.
This matter has also placed a major focus issue in the public eye: Is the holding strategy effective for all listed companies? Odaily Planet Daily will analyze this in this article.
The first delisting of a 'BNB strategic listed company' has occurred, ringing alarm bells for the 'coin-stock dual repair' industry.
Public information shows that Windtree Therapeutics Inc. (WINT) is a biotechnology company primarily focused on developing innovative therapies for respiratory diseases, particularly drugs for acute lung injury and cardiovascular diseases, such as istaroxime and aerosolized KL 4 surfactant. The company was founded in 1992 and is headquartered in Pennsylvania, USA. According to its official website, the final results of its Phase 2 clinical trial for istaroxime have been released, but the vision of 'solving significant unmet market needs' remains a long way off.
As a small biopharmaceutical company, Windtree Therapeutics Inc. has multiple medical projects in clinical stages, far from commercialization. According to the latest data, the company's net income for the most recent quarter was -$10.64 million, a significant increase in loss compared to the -$4.04 million of the previous quarter.
On July 16, the company announced that it had signed a $60 million securities purchase agreement with Build and Build Corp., and the future subscription amount may increase to $200 million. The related funds will be used to purchase BNB as the company's treasury reserves to achieve asset diversification and value creation. At that time, Windtree triggered market FOMO as 'the first Nasdaq-listed company to provide direct investment exposure to BNB tokens', with its stock price once soaring to $1.86. On July 25, it stated again that it had signed a new financing agreement of $520 million to buy BNB, but the market reaction was tepid, and the stock price declined to around $1.
A month later, what it awaited was a delisting notice from Nasdaq.
With Nasdaq rules in effect, Windtree cannot escape delisting.
According to Nasdaq Listing Rule 5550(a)(2), if a listed company's stock price has been below the minimum bid requirement of $1 for 30 consecutive trading days, Nasdaq has the right to process the stock for delisting (i.e., mandatory delisting).
It is noteworthy that this is not the first time Nasdaq has issued a 'last warning' to the company—earlier this year, Nasdaq granted the company a 180-day extension to regain compliance, but it still failed to meet the corresponding requirements on time, thus unable to escape the outcome of delisting.
The direct reason for Windtree's delisting may stem from the failure in 'niche' competition.
The 'BNB Treasury Company' authenticity dispute, Windtree becomes a victim of competition
One of the most intuitive reasons for Windtree's delisting is that a better investment target for 'BNB Treasury Company' has emerged in the market—namely, CEA Industries, supported by Binance (later renamed BNB Network Company, stock code BNC).
On July 28, the US-listed company CEA Industries and 10 X Capital announced a $500 million private placement to establish the BNB Treasury with support from YZi Labs. It is reported that the two institutions will expand the PIPE issuance scale, with over 140 subscribers participating in this issuance, including Pantera Capital, Arche Capital, GSR, Borderless, Arrington Capital, Blockchain.com, Hypersphere Capital, Kenetic, among others.
In early August, CEA Industries announced it had completed a $500 million private placement and would be renamed 'BNB Network Company', with its stock code changing to 'BNC' on August 6. YZi Labs led the investment, with over 140 institutions participating, including Pantera Capital and Blockchain.com. At the same time, the company appointed former Galaxy Digital co-founder David Namdar as CEO and former California Public Employees' Retirement System (CalPERS) chief investment officer Russell Read as chief investment officer.
Thus, the authenticity dispute over the 'BNB Treasury Company' has reached a temporary conclusion, with BNC as the winner and WINT as the 'sacrificial pawn'.
It is noteworthy that another US-listed company, Nano Labs, which focuses on the concept of 'BNB Treasury Company', also participated in CEA Industries' previous financing, spending nearly $5 million to acquire 495,050 shares of Class A common stock, along with an equal number of 495,050 warrants with an exercise price of $15.15 per share. If all warrants are exercised, Nano Labs will hold up to 990,100 shares in the company. Therefore, with a holding of up to 128,000 BNB, Nano Labs has become one of the backers of BNC, thus remaining in the game.
As of the time of writing, the closing price of BNC is temporarily reported at $21.02, with a 24-hour increase of up to 8.8%, and a market value of approximately $895 million; Nano Labs (NA) has a closing price of approximately $4.5, with a 24-hour increase of 4.9%, and a market value of approximately $104 million. In comparison, WINT's market value has fallen to about $3.15 million.
It is said that the business world is like a battlefield, and this is especially direct and brutal in the stock market.
Industry warning: The effectiveness of holding strategies also requires prerequisites and is not a 'stock price perpetual motion machine'.
From Windtree's delisting, it is evident that for most listed companies, the holding strategy is not a 'universal key' to push stock prices up. The reason why companies like Strategy and Metaplanet can achieve the effect of 'dual rise in coins and stocks' is that there are prerequisites for effectiveness. In my view, the following three conditions need to be met:
The first is that the preferred holding target is BTC. As the 'only true god' of the cryptocurrency industry, BTC's value is relatively stable and more easily accepted by the market, investors, etc. The holding strategy is more directly effective and sustainable in boosting stock prices. After all, the current price of BTC, just over $110,000, has not yet reached the target expectations for many traditional and crypto institutions. Looking at a future time span of 5-10 years or even longer, BTC still has an upward expectation of 50% or more. For cryptocurrencies, it is all about the 'market dream rate', and BTC's effects in combating inflation, diversifying risks, and boosting expectations are undoubtedly unique.
The second is the uniqueness of niche competition. In the capital market with countless targets, the competition for niches is undoubtedly brutal, as the phenomenon of 'people only know the first, not the second' is too common for most industries and investment tracks. Especially in terms of whether or not there is support from 'authentic institutions', this is a completely different concept for market users. Although there is not much difference in investment targets, the influence on market sentiment and long-term judgment is objectively present. Therefore, if one chooses to hold coins other than BTC, it is necessary to consider the public recognition, acceptability of the corresponding tokens, and the direct influence of the project parties.
The third is real business support. Unlike various recently listed companies through backdoor listings, including Metaplanet and Canopy Group, these listed companies have real business backing, making them more resilient to price fluctuations, technical security, and other risk factors, while being less subject to the regulatory scrutiny of stock markets and traditional financial market regulators, thus not needing to overly consider risks like delisting. Simply put, listed companies that can generate their own revenue have more confidence in purchasing coins compared to those relying on financing.
Windtree's delisting is just a reflection of the current development stage in the industry, while the emergence of 'ETH reserve listed companies' like Bitmine and Sharplink may be the real disruptors of what Ethereum founder Vitalik described as 'over-leveraged games'. Whether the 'holding strategy' will fail for listed companies remains to be seen.
