CZ’s YZi Labs seeks control of CEA Industries’ board amid slump
YZi Labs, an investment firm linked to Binance founder Changpeng Zhao, has moved to overhaul the board of CEA Industries, a company pivoting to build a large BNB treasury. In a regulatory filing on Monday, YZi proposed rescinding all bylaw amendments made since July, expanding CEA’s board, and electing its own slate of directors, citing what it called ongoing “destruction” of shareholder value.
YZi told shareholders the changes are intended “to address the continued destruction of stockholder value at BNC and to ensure that the Company is being run in a manner consistent with your best interest.” If a majority of outstanding shareholders approve, YZi — which previously presented itself as Zhao’s family office — would effectively gain control of what it described as the world’s largest public BNB treasury company.
BNB is closely associated with Binance, which reportedly holds a significant share of the token’s supply.
CEA shares have tumbled since YZi’s backing
CEA Industries (BNC) shares have fallen about 89% from their July 28 peak of $57.59 — the day the Canadian vape manufacturer’s stock jumped 550% after unveiling plans to become the largest BNB treasury company. The stock closed Monday at $6.47, down more than 10% on the session. It is off more than 20% year to date and trades below levels seen before its crypto pivot.
Shares in CEA Industries fell by over 10% on Monday amid YZi Labs’ launch of its board coup.
YZi helped finance CEA’s $500 million private investment in public equity (PIPE) that closed in August, which CEA said would support its plan to “establish the largest publicly listed BNB Chain digital asset treasury strategy in the world.”
Following the crypto-focused shift, 10X Capital CEO David Namdar was appointed as CEA’s CEO, and several 10X Capital executives joined the company’s board.
In its latest filing, YZi alleged that CEA’s management has been slow to provide investor updates and has undertaken “little to no media or marketing efforts” to raise the company’s profile.
YZi further accused Namdar of a “lack of devotion and loyalty” to CEA, claiming he promoted other crypto treasury firms, and suggested a reconstituted board “should explore the selection of a new CEO.”
CEA Industries did not immediately respond to a request for comment.
BNB trades low, but outperforms CEA
BNB, which provides benefits to holders on Binance’s platform, is trading at a three-month low of $829. The token has declined nearly 40% since hitting an all-time high of $1,367 in mid-October, moving largely in line with broader crypto market weakness amid macroeconomic headwinds.
Despite the pullback, BNB remains up 17.8% year to date and is slightly lower over the past 24 hours.
CEA Industries reports holdings of 515,054 BNB acquired at an average cost of $851.29, putting its mNAV — the ratio of the company’s value to the value of its crypto assets — at 0.79x.
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