Crypto Treasury Activity Still Tepid, but Capital Flows Rebound: B. Riley

Core Insights - Corporate digital asset activity has remained subdued due to recent crypto deleveraging, but capital flows are beginning to normalize as U.S.-China trade talks progress [1] - B. Riley initiated coverage of several digital asset treasury companies (DATCOs) with buy ratings, including BitMine Immersion Technologies, SharpLink Gaming, FG Nexus, Kindly MD, and Sequans Communications [1] Group 1: Market Activity - Despite market weakness, DATCOs have continued to accumulate crypto, with BitMine Immersion leading by adding approximately $300 million in ether (ETH), raising its concentration ratio to 10.6 ETH per 1,000 shares compared to the group average of 3.9x [2] - The median market net asset value (NAV) for the 25 companies tracked by B. Riley improved to 1.1x from 1.0x, while the average remained steady at 1.0x [2] Group 2: Stock Buybacks - B. Riley anticipates that firms trading below NAV will initiate stock buybacks to reduce valuation gaps, referencing ETHZilla's success in monetizing crypto holdings for share repurchases [3] - Sequans Communications is highlighted as trading at the steepest discount in the group at 0.7x NAV, with third-quarter results expected on November 4 [3] Group 3: Institutional Adoption - Solana (SOL) has launched its first spot exchange-traded funds (ETFs) in Hong Kong and the U.S., attracting $800 million in first-day inflows, reinforcing its status as a tier-one asset alongside bitcoin (BTC) and ether [4] Group 4: Company Positioning - BitMine Immersion is viewed as the best-positioned company within the DATCO coverage, while SharpLink Gaming experienced a quiet week with no significant catalysts [5]