Safety Shot Stock Plummets 50% After 25M BONK Treasury Investment

A Nasdaq-listed company saw its stock plummet by over 50% following the announcement of a $25 million treasury investment in the memecoin BONK, a move the firm positioned as a strategic pivot toward digital assets. The company, known as Safety Shot, disclosed the initiative as part of a broader collaboration with BONK’s founding contributors and an effort to integrate deeply into the memecoin ecosystem [1]. The company’s press release highlighted BONK’s technological advantages over other memecoins, citing faster transactions and lower fees compared to Ethereum-based tokens like Shiba Inu (SHIB) and Pepe (PEPE) [1].

Despite these claims, the market response was overwhelmingly negative, with shares in Safety Shot falling to $0.59 in after-hours trading, marking one of the largest single-day drops in its stock history [1]. The company had previously rebranded from Jupiter Wellness and markets the Sure Shot line of blood alcohol detox drinks. While its shares had seen a 36% rise over the past month, they remain down 22.5% year to date [1].

The firm stated it had prepared for the move by eliminating all outstanding debt and maintaining more than $15 million in cash reserves. It also plans to issue $35 million in preferred shares, which can be converted into common stock. CEO Jarrett Boon described the move as a “bold first step” in the company’s transformation and emphasized the “exciting” potential of the digital assets ecosystem [1].

BONK, currently the fifth-largest memecoin by market capitalization at $1.9 billion, has faced a 57% decline from its peak in November 2024. Analysts have questioned the logic behind allocating a significant corporate treasury to a token with such volatility and limited use cases. Critics argue that memecoins, built largely on social media hype and lacking governance structures, are unsuitable for institutional portfolios [1].

This is not the first instance of a public company entering the memecoin space. In May, another firm announced plans to build a crypto treasury including the memecoin TRUMP. However, the broader memecoin market has declined by 25% since the start of the year, according to CoinMarketCap, while the overall cryptocurrency market has risen by 22% [1].

The Safety Shot case has sparked broader discussions about corporate governance and risk management in the crypto space. Some shareholders have called for a detailed explanation of the decision-making process behind the BONK investment, with concerns growing over the lack of transparency and strategic clarity.

Source: [1] Cointelegraph (https://cointelegraph.com/news/nasdaq-listed-firm-launches-25m-bonk-treasury-play?utm_source=rss_feed&utm_medium=rss%3F_q%3D175****083725%26_%3D175****083725%26__%3D175****083725&utm_campaign=rss_partner_inbound)