DeFi Dev Corp. launches $100M buyback as SOL treasuries face market test

The leading Solana treasury company, DeFi Dev Corp., expanded its share repurchase program from $1M to $100M, in a bid to improve its balance sheet. The decision comes amid a setback for SOL prices and a rush to prove the viability of Solana treasuries. 

DeFi Development Corp. announced an expansion of its share repurchase program, with up to $100M in repurchases authorized. The timing and mode of repurchases will depend on market conditions relevant to the treasury program. 

The company has authorized a repurchase of up to $100M, with an initial cap of $10M and additional permission for the board for subsequent repurchases. The program will acquire DFDV shares on the open market. The program does not oblige the company to acquire a preset amount of common stock, and may be suspended or discontinued at any time. 

As Cryptopolitan reported recently, DeFi Dev Corp. is among the most active buyers of SOL, aiming to repeat the model of Strategy (MSTR) by linking the treasury to its stock offerings. 

Following the repurchase announcement, DFDV shares traded in their usual range at $15.71, down from its initial peak above $42. The stock price is still in the green for the year to date, though it is now past the initial hype phase. 

DeFi Dev Corp. net asset value falls below a ratio of 1

Despite the first-mover advantage and a treasury of over 2M SOL, DeFi Dev Corp. is one of the companies with an mNAV ratio below 1. The metric has fallen to 0.9, suggesting the share price is outside the range of hype. 

A higher mNAV is a sign of more enthusiasm for the stock of the digital asset treasury (DAT) company. A ratio below 1 is also not a sign of a good deal or an indicator of future stock price growth.

DeFi Dev Corp. has no target ratio or a SOL purchase deadline, and has stalled at 0.0816 SOL per share. The entire treasury of DeFi Dev Corp. is locked to run a validator, accumulating regular rewards.

Most other Solana DAT companies have a mNAV below 1, with the exception of Forward Industries, Inc., currently the leading treasury with the most aggressive buying schedule. Forward Industries retains a mNAV ratio of 1.8, as the stock trades at $31.10. The company still trades relatively close to its peak at $39.

SOL market price weakens

SOL dipped to a recent local low at around $208, still trading at the lowest price for the past week. 

The recent market-wide drawdown briefly affected all altcoins. For SOL, the dip raised issues on the potential return to new all-time peaks. 

The case for SOL treasuries includes the potential for passive rewards. However, SOL remains more volatile compared to BTC and ETH, and may incur significant losses for treasury companies. For now, total reserves remain unchanged at 17.04M SOL, despite the recent approval of multiple stock-based purchase facilities. Just 17 entities hold SOL, for around 2.96% of the total supply.

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