Forward Industries Approves $1 Billion Buyback Program

Forward Industries’ Board of Directors has authorized a $1 billion stock buyback program, allowing the company to repurchase its outstanding common stock through September 30, 2027.

The board authorization came as the Solana treasury company filed a resale prospectus supplement with the United States Securities and Exchange Commission.

Forward Industries Authorizes Buyback Program

Forward Industries has approved a $1 billion share repurchase program as its stock continues dropping. The program was announced on November 3 and allows the company to repurchase its outstanding common stock through September 30, 2027. The board’s authorization came as the Solana treasury company filed a resale prospectus with the Securities and Exchange Commission (SEC). Forward Industries currently holds over 6.8 million SOL on its balance sheet, making it the largest corporate holder of the token.

Forward Industries purchased its SOL holdings for an average price of $232 per token. The value of its holdings is around $1.2 billion at current market prices. However, the company’s SOL bet has hit rough weather, as it sits on unrealized losses of around $382 million, a 24.13% decline from the original purchase price. Forward Industries’ stock registered a major drop on Tuesday, falling nearly 20% as crypto-related equities faced selling pressure. As a result, the stock fell from a high of $39.60 to $10.44, a 73% decline from peak levels.

Confident About SOL Strategy

According to Forward Industries Chairman Kyle Samani, the resale registration is a routine post-PIPE process. Samani added that a buyback program sends a clear message that the company is committed to creating long-term shareholder value. The buyback authorization gives the company the flexibility to return capital to shareholders while continuing to focus on its Solana treasury and operational initiatives. However, investors are wary after the company’s stock slipped 20% on Tuesday thanks to broader market weakness and selling pressure.

Market Value Below Net Asset Value

The drop in stock price has pushed Forward Industries’ market capitalization to $900 million, lower than the value of its SOL holdings. As a result, the company’s market-to-net-asset value ratio has dipped below 1. Investors are now valuing the firm at less than the value of its SOL holdings, indicating growing skepticism about treasury business models. However, Forward has doubled down on its strategy and has even launched a validator node on the Solana network, deepening its involvement.

Crypto Treasury Model Under Pressure?

Analysts have warned that several crypto treasury companies are facing a valuation crunch as their enterprise values fall relative to their underlying crypto holdings, effectively reducing their net asset value. This creates a problem as the market values these treasury companies at a discount compared to their holdings, suggesting investors see little value in the company beyond its holdings. Venture capital firm Breed has already issued a stark warning, stating that only a handful of crypto treasury companies will be able to survive a “death spiral” triggered by falling net asset values.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.