Safety Shot, a Nasdaq-listed beverage company, saw its stock fall by more than 50% after announcing plans to purchase $25 million worth of the Bonk memecoin. The move is part of a new treasury strategy intended to align the company with the growing memecoin ecosystem.
Strategic Alliance with Bonk Contributors
The company said on Monday that it has formed a strategic alliance with founding contributors of Bonk. According to Safety Shots statement, the Solana-based token offers advantages over rival memecoins, including high-speed, low-cost transactions. The firm views these features as giving Bonk an edge over competitors such as Shiba Inu and Pepe, which run on Ethereum and are hampered by higher fees and slower processing times. Dogecoin was also cited as a rival, with Safety Shot noting its inflationary model.
Memecoin Market Context
Bonk is currently the fifth-largest memecoin by market capitalization, standing at $1.9 billion with 77 trillion tokens in circulation. Its price reached a peak in November 2024 but has declined 57% since then, following a drop in enthusiasm for memecoins over the past six months.
Company Strategy and Financing
To enable the move, Safety Shot said it settled all outstanding debt and maintains more than $15 million in cash reserves. The firm also plans to issue $35 million in preferred shares, which can be converted into common stock. CEO Jarrett Boon described the alliance as a significant step in the companys broader corporate evolution.
Mixed Market Reaction
Despite these preparations, investors reacted negatively. Safety Shot (ticker: SHOT) fell over 50% to $0.59 in after-hours trading on Monday. The company's shares had risen 36% over the previous month but are down 22.5% year-to-date. Safety Shot, formerly Jupiter Wellness, produces a blood alcohol detox drink called Sure Shot.
Other Companies Entering the Memecoin Space
Safety Shot is not the first public company to launch a crypto-focused treasury. In May, GD Culture Group announced efforts to raise up to $300 million for a crypto reserve that would include the TRUMP memecoin. According to CoinMarketCap, the overall memecoin market cap has fallen by 25% since the start of the year, while the broader crypto market cap rose 22% over the same period.
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