TLDR
- Dan Ives joins as chairman of Eightco (OCTO), which raised $270 million to buy Worldcoin cryptocurrency
- Eightco stock surged over 3,000% from $1.45 to $45.08 after the announcement
- The company follows MicroStrategy’s model of holding crypto assets on its balance sheet
- Worldcoin jumped 46% in 24 hours following Eightco’s investment plans
- Market analysts call this another example of “market madness” with extreme premiums for crypto wrappers
Last Friday, Eightco Holdings was worth $4.4 million. By Monday’s close, the company had an implied market value of $8.5 billion.
The explosive growth came after the company announced plans to purchase Worldcoin cryptocurrency. Dan Ives, a well-known tech analyst at Wedbush Securities, was named chairman of the board.
Eightco completed a private sale of 185 million shares to raise about $270 million. The company previously had just three million shares outstanding.
The new shares were sold at $1.46 each. By Monday’s close, they traded at $45.08 after reaching as high as $83.12 during the session.
The company plans to use the cash to buy Worldcoin tokens. Worldcoin is the cryptocurrency project run by OpenAI CEO Sam Altman.
Worldcoin’s value jumped 46% in the 24 hours following Eightco’s announcement. The token trades on major crypto exchanges including Crypto.com.
World’s Biometric Identity Project
World operates a global biometric scanning program. The company scans people’s irises in exchange for Worldcoin tokens.
Sixteen million people have had their irises scanned over the past two years. World’s app aims to become a global source of personal identity verification.
Ives expressed enthusiasm about his new role in a press release. He called it “the next step in the AI revolution around authentication and Proof of Human.”
“While AI gives us infinite abundance, World gives us infinite trust and authentication,” Ives stated. He will continue his analyst duties at Wedbush Securities.
Ives covers major tech stocks including Apple, Microsoft, Tesla, and Palantir Technologies. Wedbush representatives have not commented on his new chairman position.
Following the MicroStrategy Playbook
Eightco’s strategy mirrors that of MicroStrategy, formerly known as Strategy. MicroStrategy has spent $47.2 billion purchasing Bitcoin for its balance sheet.
MicroStrategy trades at roughly two times book value at Monday’s close of $329.90. This means investors pay twice the value of the company’s Bitcoin holdings.
Eightco commands a much higher premium. The company trades at roughly 30 times book value based on its new share count.
Multiple firms participated in Eightco’s private offering. These included MOZAYYX and BitMine Immersion.
BitMine’s chairman is Wall Street strategist Tom Lee. Fund manager Cathie Wood is an investor in BitMine, which focuses on crypto accumulation.
Market analysts are calling the surge another example of extreme speculation. Mike O’Rourke of JonesTrading described the market’s “animal spirits” as “frenzied as ever.”
O’Rourke noted that Eightco’s only material assets are the $250 million in sponsor financing. Yet the stock closed with an $8.5 billion market cap.
Eightco wasn’t the only crypto conversion play on Monday. Forward Industries shares jumped 59% to $25.96 after announcing a $1.65 billion Solana investment.
In both cases, sponsors now control approximately 98% of the companies. O’Rourke called it an example of “extreme greed.”
The willingness to pay huge premiums for crypto exposure through equity wrappers continues to surprise analysts. Investors can purchase these digital assets directly on exchanges.
This playbook has been copied from Michael Saylor’s MicroStrategy model. However, MicroStrategy’s premium has shrunk from over 3 times to 1.5 times net asset value.
The scarcity value that once made MicroStrategy unique is eroding. Digital asset treasury conversion deals are now announced weekly or daily.
BitMine agreed to purchase a $20 million stake in Eightco at the $1.46 per share offering price.
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