Sonnet BioTherapeutics Merges with Rorschach I LLC

Sonnet BioTherapeutics, Inc., listed on Nasdaq, will merge with Rorschach I LLC, transforming into Hyperliquid Strategies, Inc., and introducing a new HYPE treasury strategy. Rorschach I LLC is newly established and linked to Atlas Merchant Capital LLC, associated with Paradigm Operations LP and other sponsors, as stated in a recent press release. Upon finalization, the company will rebrand as Hyperliquid Strategies, Inc., anticipated to hold 12.6 million HYPE tokens and $305 million in cash, totaling an estimated value of $888 million. Strategic investors such as Paradigm, Galaxy Digital, Pantera Capital, D1 Capital, Republic Digital, and 683 Capital are involved, with Hyperliquid Strategies expected to trade under a new ticker as a public crypto treasury firm on Nasdaq post-merger. "Hyperliquid has emerged as a crypto project with solid fundamentals: strong contributors, high quality products, and rapid growth," stated Paradigm co-founder Matt Huang. "There’s significant institutional interest in Hyperliquid, yet accessing the HYPE token in the U.S. is challenging. We view this treasury strategy as a key contributor to the Hyperliquid ecosystem in the long term." The cash proceeds will allow Hyperliquid Strategies to buy more HYPE tokens, establishing a top strategic reserve. Hyperliquid has seen a substantial trading volume, exceeding $1.5 trillion over the last year and setting a record with $11.3 billion in open interest. Post-merger, Atlas co-founder and CEO Bob Diamond will chair Hyperliquid Strategies, with co-founder and CIO David Schamis as CEO. Additionally, former Boston Fed president Eric Rosengren and two existing independent directors from Sonnet will join the board. Diamond expressed excitement at partnering with Sonnet, aiming to shape a leading crypto treasury management strategy that benefits shareholders. He also noted the distinct value of HYPE and the Hyperliquid protocol in the digital asset market, emphasizing their team's relevant experience in crypto and finance. Sonnet BioTherapeutics specializes in oncology-focused biotechnology, using a proprietary platform to create biologic drugs. After the merger, Sonnet will operate as a subsidiary of Hyperliquid Strategies, focusing on its existing business and providing shareholders with a contingent value right (CVR) tied to its biotech assets. Following the announcement, Sonnet BioTherapeutics shares surged around 300% in pre-market trading, boosting its market cap to over $16 million. In June, shares of another Nasdaq-listed company, Lion Group, also rose significantly following a $600 million funding announcement for a HYPE treasury project. Disclaimer: The Block is an independent media outlet providing news and research. As of November 2023, Foresight Ventures is a major investor in The Block and operates independently to deliver objective information about the crypto industry.