Sonnet BioTherapeutics Soars 290.33% on Strategic Business Combination

On July 14, 2025, Sonnet BioTherapeutics experienced a remarkable surge of 290.33% in pre-market trading, marking a significant milestone for the company.

Sonnet BioTherapeutics has announced a strategic business combination with Rorschach I LLC, forming Hyperliquid Strategies Inc. This new entity will focus on building a substantial reserve of HYPE tokens from the Hyperliquid Layer-1 blockchain. The combination is backed by prominent strategic investors, including Paradigm and Galaxy Digital, and is expected to bring in approximately $583 million in HYPE tokens and $305 million in cash, totaling $888 million in value. This move positions HSI as a public cryptocurrency treasury company, aiming to enhance its reserve strategy.

Key leadership roles in the new entity will be filled by executives from Atlas Merchant Capital, with Bob Diamond as Chairman of the Board and David Schamis as Chief Executive Officer. Sonnet will continue to develop its biotech assets as a wholly owned subsidiary of HSI. The business combination is subject to Sonnet stockholder approval and is expected to close in the second half of 2025. Additionally, Sonnet plans to raise $5.5 million through a private placement to support its corporate and operational objectives.

While the business combination offers significant financial resources and strategic backing, it also comes with potential risks. The dilution of existing shareholders, with current owners of Rorschach and new investors expected to own approximately 98.8% of the newly formed entity, is a notable concern. Additionally, the volatility and risks related to the HYPE token could adversely affect the value of the business combination. The successful completion of the transaction depends on shareholder approval and other customary closing conditions, which could introduce delays or prevent the perceived benefits of the transaction.