Market Proves Holding DAT Stocks Is Worse Than Holding $SOL

Mere months ago, $SOL holders were convinced that Digital Asset Treasuries, and their 9-10 fig fundraising efforts, were the catalyst that would send $SOL to new all-time highs.

Today, the vast majority of DATs are down significantly on their entries, without a sufficiently strong mNAV to raise additional capital or new lines of credit.

Amidst the uncertainty, DAT stock investors have been hit harder than most, with share prices enduring more devastating price action than $SOL itself.

DAT Investors Down 50% From Top - At Best

Much to the chagrin of the TradFi player seeking unconventional exposure to Solana, $SOL DAT share prices are in freefall. Since Solana’s most recent peak on September 19, Solana’s biggest DATs have plummeted in value, suffering an average drawdown of 61.5%.

Forward Industries and the Solana Company, the two biggest firms by $SOL holdings, have been hit hardest, down 70.38% and 81.41% respectively. Holding true to the promise of being a leveraged bet on $SOL, DAT share prices have underperformed their underlying asset. $SOL has tumbled 40.6% in the same time period. 

Cynicism towards the DAT model has never been stronger, with social commentators claiming cratering prices and declining mNAVs are proof that DATs are poor investment vehicles. 

Naturally, DAT representatives are undaunted, likely having long-term time horizons and contingency plans in place for prolonged bearish circumstances.

mNAVs Under Pressure

Exacerbated by plummeting share prices, Solana DAT mNAVs have been compressed into a difficult position. As the relative value of the company’s holdings to its market cap declines, DATs are expected to struggle to raise additional capital or lines of credit with which they can continue $SOL accumulation.

According to Blockworks data, only one of the top seven $SOL DATs has an outstanding mNAV ratio greater than 1. While Solana DATs generally aren’t liable to liquidation or forced selling mechanisms, their collapsing valuations in relation to their treasuries are hardly a sign of strength.

Upexi Joins Buyback Brigade

Perhaps in a bid to defend declining stock prices and inflate mNAVs, DATs are preparing to allocate their capital towards buying their own stock, rather than more $SOL. 

Upexi is the latest firm to announce a share repurchase program, committing up to $50M towards stock buybacks and joining fellow DAT operators Forward Industries and the Solana Company.

Meanwhile, Defi Development Corporation has announced an offering of up to $65M in a perpetual preferred stock offering, targeting continued $SOL accumulation.

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