Tiny logistics firm's shares surge on plan to buy Trump Coin
Freight Technologies said it will use proceeds from the sale of convertible notes to buy the Trump digital token. The company intends to start with a US$1 million offering, and may raise up to US$20 million. The penny stock more than doubled on Friday (May 2), giving it a US$4.7 million market value. The move followed a more than 20 per cent swing up and then back down in the two trading sessions after Wednesday's morning announcement.
The Houston-based company said in a press release that it is one of the first public companies to make the Trump coin 'a cornerstone of its digital asset strategy'. The purchase came after Freight Technologies acquired FET tokens from Fetch.ai, a decentralised artificial intelligence platform. As at Apr 29, the company said it holds about US$8 million worth of FET.
Freight Technologies and other companies are following in the footsteps of Michael Saylor's MicroStrategy, which has turned to the sale of convertible debt and other securities to fund the purchase of Bitcoin worth more than US$50 billion.
Investors have been driving up the shares of companies that scoop up cryptoassets. Upexi shares have climbed more than 500 per cent since the company announced a plan to raise US$100 million to buy the Solana token, while blank-check company Cantor Equity Partners has more than quadrupled on plans to become a Bitcoin-investment vehicle. Such amplified moves are not uncommon in companies with low floats and harken back to the stock swings of the meme-stock era during the pandemic.
The Trump coin, however, is far less established than the cryptocurrencies other firms have targeted – it debuted several days before the president's inauguration and has since lost much of its value.
The president's memecoin has also prompted an uproar among critics over potential conflicts of interest and ethics violations. Democratic senators Adam Schiff of California and Elizabeth Warren of Massachusetts said last month that a planned private dinner for top holders of the coin may constitute 'pay to play' corruption, and are calling for an ethics investigation.
Freight Technologies' chief executive Javier Selgas said in the release that purchasing the coin was a way to 'advocate for fair, balanced, and free trade between Mexico and the US'. BLOOMBERG
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