ALT5 Sigma's $1.5B Bet on Trump-Linked WLFI Token
ALT5 Sigma Invests Heavily in WLFI Treasury
ALT5 Sigma Corporation has secured $1.5 billion to initiate the World Liberty Financial (WLFI) corporate treasury. This move involves selling 200 million shares of common stock.
According to their announcement, ALT5 Sigma is conducting a registered direct stock offering of 100 million shares alongside a concurrent private placement for another 100 million shares. Both are priced at $7.5 per share, totaling $750 million each.
This development surfaces amidst reports that World Liberty Financial (WLFI), a crypto venture with ties to the Trump family, is planning to establish a publicly traded entity to hold its WLFI tokens. The company aims to raise approximately $1.5 billion, targeting completion by August 12.
An SEC filing reveals that ALT5 Sigma will receive $750 million worth of WLFI tokens from World Liberty Financial in exchange for one million shares and 99 million pre-funded warrants at an exercise price of $0.01. The issuance of these shares is contingent on increasing ALT5 Sigma's authorized share limit.
Details of the Investment
The remaining $750 million will be received in cash through a registered direct sale. ALT5 Sigma intends to allocate these funds to expanding its WLFI corporate reserve.
Market reaction to the news appears to reflect a 'buy the rumor, sell the news' scenario, with ALT5 Sigma's stock price showing a 9.8% decrease at the time of this report. However, the stock had previously seen a 19% increase over the preceding five days.
Broader Trend of Crypto Treasuries
ALT5 Sigma's move aligns with a growing trend of companies establishing crypto treasuries, extending beyond Bitcoin (BTC) to include other digital assets. Data indicates that corporate Ether (ETH) holdings have reached 3.04 million ETH, valued at $13 billion.
Ethereum co-founder Vitalik Buterin has expressed support for Ether treasury initiatives while cautioning against excessive leverage. Other companies are also exploring altcoin treasuries, with examples including public companies acquiring Solana (SOL) to benefit from staking rewards.