Stablecoin Development Corp, which had traded around a $50 million market capitalization for months, has climbed nearly 10x in about two weeks with no clear explanation, according to Protos.
Tether is a major investor in the company. Protos said the firm’s primary business appears to be earning interest from USDS, which it described as not necessarily a highly lucrative opportunity.
The report noted that a $50 million market cap may have looked low for a company holding more than $150 million in assets and carrying little debt. Even so, the stock briefly traded near $10 earlier today, valuing the company at roughly $500 million. For a stablecoin treasury company with far less than $500 million in assets, that valuation stood out. The shares have since dropped back to about $4.50, again with no news attached to the move.
Company told the SEC it had no explanation
Protos said short sellers have largely been unable to find affordable shares to borrow, while the stock has kept moving sharply higher since September 25. The outlet said it could identify no reason for Stablecoin Development Corp to appreciate so quickly.
Four days after unusual trading activity appeared, the company filed with the U.S. Securities and Exchange Commission, saying it did not know why the activity was happening or who was behind the trades. The company also said it “does not believe corrective actions are appropriate.”
Tether warrants are now worth much more on paper
Protos also reported that Tether holds warrants related to Stablecoin Development Corp that become exercisable in mid-October. Instruments that had more or less been treated as a write-off now appear considerably more valuable after the rally.
The report added that Stablecoin Development Corp no longer seems to face delisting danger from NYSE American.
Protos also referenced Tether having publicly listed a company that partially controls USDS.