DeFi Development Corp authorized buybacks of its 13% CHAD preferred stock but has no current plan to buy, saying its first goal is getting CHAD to $10 par.
Key Facts
DeFi Development Corp's board authorized the repurchase of up to all of its CHAD preferred stock, including future issuances, the company said on Tuesday.
The company said it does not currently intend to buy CHAD and that its first objective is getting the shares to their $10 stated amount.
CHAD currently pays a 13% annual dividend, and the company sold its first CHAD shares at $8 in September, with proceeds earmarked for purposes including SOL purchases.
DeFi Development Corp., a Nasdaq-listed company that holds Solana (SOL) in its treasury, has authorized a program to repurchase its CHAD preferred stock while saying it has no current plan to buy any shares.
The authorization gives the company a tool to support CHAD, a perpetual preferred stock that Chief Executive Joseph Onorati called "fuel for the DFDV engine" in the company's third-quarter update on Monday.
DeFi Development's CHAD Buyback Program Terms
The program covers every CHAD share outstanding, including any the company issues later, according to Tuesday's press release. Purchases may be made on the open market or in private deals, with no fixed expiration date and no obligation to buy any particular number of shares.
"Our first objective is simple: get CHAD to par. We are not announcing that we intend to buy CHAD today," Onorati said.
The company said that once CHAD has established itself at its $10 par, it may use the program opportunistically if the shares later trade below that level.
CHAD Funds DeFi Development's SOL Treasury
DeFi Development launched CHAD last month to raise money for purposes including its SOL corporate treasury. It proposed the preferred stock offering on Aug. 31 and priced 1,375,000 shares at $8 each on Sept. 3, for gross proceeds of about $11 million, according to its pricing announcement.
CHAD carries a variable dividend, initially 13% a year on the $10 stated amount, paid each business day. The company said on Monday it had recently established a $300 million at-the-market program for the stock.
DeFi Development held about 2.56 million SOL and SOL equivalents, worth about $302 million, according to its preliminary third-quarter estimates. It also runs validator infrastructure and earns staking rewards on its holdings.
Other crypto treasury companies are making similar moves. Strive on Monday disclosed a buyback facility of up to $500 million for its SATA preferred alongside its latest Bitcoin purchase.
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