Mill City Raises $500M to Expand Sui Treasury Amid Share Price Drop

Mill City Ventures III has announced a new $500 million equity line to further expand its Sui (SUI) treasury strategy, following a $450 million raise earlier in the week that was used to purchase 76.2 million SUI tokens valued at $276 million[1]. The firm has positioned itself as the first publicly traded company to establish a Sui treasury with an official relationship to the Sui Foundation, aiming to scale its SUI-per-share value through an institutional-grade approach[1].

Stephen Mackintosh, Mill City’s chief investment officer, highlighted the strategic rationale behind the move, stating that it allows the company to capitalize on Sui’s potential growth and enhance public market access to next-generation blockchain technology[1]. The additional capital is expected to provide the necessary resources to increase the firm’s SUI holdings and consolidate its position as a key player in the emerging blockchain treasury sector[1].

Despite the strategic intent, the announcement triggered a significant market reaction, with MCVT shares falling 11.4% to $4.91 on Friday, according to Google Finance data[1]. The stock continued to decline in after-hours trading by an additional 4.28%[1]. The drop in share price has been attributed to investor concerns over equity dilution and the long-term implications of the firm’s capital allocation strategy[1].

This is a notable development in the context of recent market dynamics, as Mill City’s shares have surged 165% since July 24—just four days before the company unveiled its SUI treasury strategy[1]. The initial $450 million raise was supported by major institutional investors, including Pantera Capital, Electric Capital, ParaFi Capital, and FalconX[1]. Galaxy Asset Management is overseeing the treasury asset management process, with nearly 98% of the proceeds allocated to SUI-related investments[1].

Sui, a layer-1 blockchain optimized for AI, gaming, and other high-demand applications, is the 15th largest cryptocurrency by market cap[1]. Its native token, SUI, has dropped 2.4% to $3.50, reflecting broader market volatility[1]. Mill City’s move reflects a growing trend among public companies to diversify their treasuries beyond Bitcoin and Ethereum, with others recently adopting tokens such as BNB, Solana, and XRP[1].

While the firm’s SUI strategy is positioned as a forward-looking investment in blockchain infrastructure, the immediate market response underscores the risks and uncertainties associated with such an approach[1]. The long-term success of the strategy will depend on Sui’s continued development, adoption, and the firm’s ability to manage risk effectively[1].

Source:

[1] Mill City to Raise $500 Million for Sui Treasury – Cointelegraph (https://cointelegraph.com/news/mill-city-to-raise-500-million-for-sui-treasury)