assetentities(US:ASST) Hua Er Jie Jian Wen·2025-09-26 07:17Core Insights - Companies that heavily invested in Bitcoin through PIPE (Private Investment in Public Equity) are facing significant pressure as their stock prices approach the discounted issuance levels, with potential losses for investors reaching up to 55% [1][4][7] - The structural risks associated with PIPE financing are becoming evident, as several companies' stock prices have already dropped below their PIPE issuance prices, indicating a broader trend in the market [1][4][5] Group 1: Stock Price Dynamics - The stock price of Kindly MD, after announcing a PIPE financing at $1.12 per share, surged to a high of $34.77 but subsequently plummeted by over 97% to $1.26, nearly matching the PIPE issuance price [2][4] - Strive (ASST) is currently trading at $3.00, down 78% from its 2025 peak, with a PIPE issuance price of $1.35, indicating a potential further decline of up to 55% if it returns to the issuance level [4] - Cantor Equity Partners has a current stock price of $19.74, with a PIPE price of $10.00, reflecting a nearly 50% potential drop, while Empery Digital's stock is trading at $7.94, 21% below its PIPE price of $10.00 [4][5] Group 2: Structural Issues of PIPE Financing - The reliance on PIPE financing by Bitcoin treasury companies stems from their need for rapid capital to execute Bitcoin strategies, often due to a lack of traditional funding sources or sufficient operational income [5][6] - PIPE transactions lead to immediate equity dilution and create a significant "overhang effect," where PIPE investors are incentivized to sell their shares once they are allowed to do so, exerting continuous downward pressure on stock prices [5][6] Group 3: Feedback Loop and Market Concerns - The current market dynamics suggest a feedback loop where declining Bitcoin prices pressure treasury company stocks, triggering PIPE investor sell-offs, which further depresses stock prices and may force companies to liquidate Bitcoin holdings to stabilize finances [7] - Without a resurgence in the cryptocurrency market, many treasury companies' stock prices are likely to continue declining towards or below their PIPE issuance levels, highlighting the unique risks associated with their financing structures [7]