On July 28, the long-rumored "orthodox army" of the BNB treasury finally fell on a small nicotine e-cigarette company called VAPE. This small-cap stock, which previously had a market value of less than 10 million US dollars, unexpectedly became the lucky winner personally selected by the richest Chinese man.
The news was rushed out in advance, causing the stock to surge by over 1,800% before the market opened. After the opening, the stock price jumped from Friday's closing price of $8.88 to an intraday high of $82.88.
An insider revealed to BlockBeats that the Binance investment team had already started the acquisition of shell companies and private equity financing preparations for the BNB Treasury project as early as early July. Another insider said that in order to prevent the shell resources from encountering the risk of "rat trading" before landing, the team had bought several small US shell companies at the same time, and did not finalize the final target VAPE until the last minute.
Behind this unusual stock price movement is a PIPE private financing agreement - the amount is as high as US$500 million, jointly led by 10X Capital and YZi Labs, with the intention of building VAPE into the world's largest listed BNB treasury company.
This is not a retail investor frenzy, but a capital experiment with a sophisticated structured design - a new arbitrage path of "compliant holding of BNB + valuation premium of listed companies", and it may also be a parallel narrative breakthrough for the Binance ecosystem.
VAPE, a previously unknown company, is being remembered by the wider capital market as a key variable in the "BNB treasury" narrative.
Dissecting the BNB Treasury’s Operational Path: From Shell to Valuation Leverage
On July 28, VAPE (formerly CEA Industries) officially announced the PIPE private financing led by 10X Capital and YZi Labs. The initial financing scale reached US$500 million, including US$400 million in cash + US$100 million in crypto asset subscription. In addition, if all the attached warrants are exercised, the total financing scale can be expanded to a maximum of US$1.25 billion.
This financing is not only of astonishing scale, but also clearly positioned: VAPE aims to create the world's largest, publicly listed BNB treasury company, introduce BNB into the capital market, and attract compliant funds to participate in the BNB Chain ecosystem through an asset allocation model.
This also means that VAPE is no longer the hardware or retail supplier of the past, but has transformed into a financial structure platform focusing on BNB, integrating the value and income mechanism of BNB into the capital structure of listed companies.
After the PIPE financing is completed, VAPE will be led by a core team with institutional and digital asset backgrounds - David Namdar (co-founder of Galaxy Digital and current senior executive of 10X Capital) will serve as CEO; Russell Read (former Chief Investment Officer of CalPERS and current CIO of 10X Capital) will serve as CIO; Saad Naja (senior operator with background in Kraken and Exinity) will also join the company's executive level.
10X Capital will serve as the asset manager for the BNB treasury, responsible for structure design, capital operations, and subsequent strategic implementation. YZi Labs will provide strategic support to facilitate the smooth execution of the PIPE placement. Over 140 institutional and crypto funds (such as Pantera Capital, Blockchain.com, GSR, and Arrington) participated in this financing, providing strong capital backing.
BlockBeats analyzes VAPE's announcement, BlockBeats that the proceeds from the financing will be used to establish a long-term treasury strategy focused on BNB. Over the next 12-24 months, VAPE will build an initial BNB holding and increase its holdings through methods such as ATM (At-The-Market) issuance. The company will also consider participating in BNB staking, lending, and DeFi protocol yield farming to generate structured returns while maintaining a conservative risk framework.
This operating model is similar to MicroStrategy's BTC treasury model, but focuses on BNB, which has stronger ecological uses. It supplements the logic of currency holding value-added through income-based strategies, giving it cash flow and premium space.
Upon closing of the PIPE, VAPE will become one of the largest publicly traded companies providing exposure to a single Layer-1 blockchain.
Simply put, this round of funding ultimately gave the company a $1.25 billion crypto arsenal to buy BNB. By comparison, SharpLink (SBET), one of the earliest companies to bet on the ETH treasury concept, has only raised $525 million in total funding.
After the transaction is completed: How will the stock price move?
Following the signing of the PIPE, VAPE announced that the financing is expected to close by July 31, 2025. At that time, the funds will be available and the company's updated capital management strategy will take effect. According to the announcement, the company's common stock will continue to trade on the Nasdaq Capital Market under the symbol "VAPE."
PIPE financing is essentially a targeted share issuance that "exchanges a discount for funds." Simply put, the company offers a discount on shares to specific investors in exchange for a substantial amount of capital. The primary financing amount for VAPE is $500 million, of which $400 million is in cash, meaning the remaining $100 million is in BNB assets. This comes with a warrant mechanism that can raise up to $1.25 billion. In short, the company will issue a large number of new shares and warrants to PIPE investors.
This will directly lead to two structural consequences: Existing shareholders' shareholdings will be diluted. If calculated on a fully diluted basis, existing shareholders' voting and profit rights will decline significantly; and the company's capital structure will become more complex. Warrants, lock-up clauses, and phased exercise mechanisms will cause the company's valuation in the capital market to lean more towards a "structural model" rather than a fundamental model.
With the completion of the PIPE placement, VAPE's equity structure will shift from a "controlling type" to a "circulating type", especially after the warrants are exercised, the company's freely floated share capital will increase by an order of magnitude.
This is particularly evident in the PIPE terms of VAPE: this round of transactions has designed a large-proportion warrant mechanism, allowing investors to subscribe to the company's new shares at a price lower than the market price at a specific time point, forming a typical warrant + placement combination arbitrage structure.
Specifically, such warrants generally have the following characteristics: extremely low pricing: far lower than the public market share price, creating potential arbitrage space; phased unlocking: some warrants are unlocked upon completion of financing, while the rest have price triggering, time rolling and other mechanisms; possible dynamic execution in conjunction with market prices: when the share price is higher than a certain threshold (such as 2 to 3 times the PIPE pricing), forced exercise or accelerated conversion clauses may be triggered.
Under this structure, VAPE stock price behavior is driven not only by fundamentals but also by the behavior of PIPE investors. Once valuations deviate from realistic asset levels, this structure creates a strong incentive to cash out, ultimately becoming a source of liquidity shocks.
So when it comes to stock prices, will it go up or down?
We will analyze VAPE based on existing PIPE cases. This structural game generally presents the following three-stage path:
Phase 1: Expectation-driven phase (already happening)
Following the PIPE announcement on July 28th, VAPE's stock price skyrocketed 800% in pre-market trading, soaring from $8.88 to the $80 range, triggering multiple circuit breakers. At this point, the market, unfocused on fundamentals, priced solely on the narrative expectations contained in the announcement, fostering intense speculative sentiment.
Since the financing has not yet arrived and the subscription warrants have not been unlocked, the market is in a "low circulation, high sentiment, and no supply" structure, and the stock price is extremely sensitive to expectations.
Phase 2: Structure Release Phase (after transaction completion)
Once the transaction is completed, expected on July 31, and funds are in place, some PIPE investors will receive initial shares and transferable warrants.
At this point, the market enters a delicate range: if the stock price remains high, warrant holders may choose to exercise their warrants quickly to cash out, creating price suppression; if the market loses confidence in the treasury model, early arbitrageurs will exit the market immediately; if the company discloses that it did not build a BNB position as expected, it will also weaken the expectation of "on-chain NAV anchoring."
During this phase, volatility increases significantly, and pricing becomes driven by a shift from “value anchoring” to “capital behavior.”
Phase 3: Valuation regression or secondary narrative launch
If BNB performs strongly and the company releases detailed on-chain revenue, the market may refocus on the "Crypto NAV+" model, driving valuations into a second surge; if market sentiment cools or PIPE parties continue to cash out, the company's stock price will return to the asset value center or enter a liquidity vacuum zone.
This is also the key stage where most PIPE projects eventually diverge - some enter the secondary long-term transaction logic, while others become one-off cases of "telling the story and leaving the market".
Rising prices may stem from structural scarcity; falling prices often stem from a liquidity slowdown. Both paths have been repeatedly observed in other PIPE cases. Therefore, rising and falling prices aren't really about value judgments, but rather a competition over the speed of liquidity release.
Shell Company Choice: What are the conditions for VAPE?
If we trace the story of VAPE back further, we will see a completely different starting point.
VAPE's predecessor was CEA Industries, an engineering equipment company specializing in indoor agriculture and cannabis temperature control systems. Its subsidiary Surna mainly provides services such as LED lighting, air circulation, and hydroponic equipment, and its customers are mainly North American cannabis growers. The company has long been in a "three lows" state of low growth, low profits, and low market value.
According to data from StockAnalysis and TipRanks, the company's annual revenue will be less than $6 million by the end of 2024, its market value has long hovered below $10 million, and its U.S. stock liquidity is extremely low.
In 2024, the company attempted its first strategic transformation: it acquired the central Canadian vape chain brand Fat Panda for 18 million Canadian dollars. The latter has 33 stores, annual revenue of more than 38 million Canadian dollars, and an EBITDA rate of nearly 21%. This is an attempt to shift from a "hardware seller" to a "terminal retailer", marking the transition of VAPE from an equipment supplier to a consumer brand.
But this is not enough to support a revaluation of the company.
Therefore, VAPE was not particularly eye-catching in the past, and could even be described as a "drowning company in the capital market." However, these very flaws have become the most valuable qualities of a "shell company": a sufficiently small shell; a sufficiently clean equity structure; market capitalization potential to be activated; and a narrative vacuum in the crypto market (BNB exposure).
For VAPE, whether it can become a "MicroStrategy of BNB" case remains to be verified. But what is certain is that it is no longer the original e-cigarette company, but has become a programmable shell embedded in the capital game - the shell is a US-listed company, the core is a structured financial instrument, and the soul is the ability to manipulate narratives and emotions.
Control and core team: Who is driving this financing?
Behind this transformational experiment of "trading assets for valuation," VAPE serves as a financial vehicle, not an operating entity. The true driving force behind this transformation is a team of traders with a core focus on capital structure—a mixed team with backgrounds in finance and crypto. Their goal isn't simply to secure a round of financing, but to build a self-contained valuation loop: from primary placements to building on-chain asset positions, and finally to releasing narratives in the secondary market.
After the signing of PIPE, the actual control logic of the company has actually changed. The original management team mainly has industrial and retail backgrounds and does not have the ability to lead the on-chain treasury and structured asset management. The real control has gradually shifted to the financing leaders - 10X Capital and YZi Labs.
10X Capital, the lead institution in this PIPE, has long focused on SPAC mergers and acquisitions, cross-border capital arbitrage, and structured transactions, making it a classic "leveraged capital engineer." Since 2023, the team has attempted to expand the MSTR model to ETH, SOL, and even LSD. Their recent bet on BNB clearly aims to replicate MicroStrategy's treasury + valuation compounding structure.
YZi Labs: The strategic advisor for this round of transactions, widely believed in the industry to have direct ties to the CZ Family Foundation, is a key force behind BNB's treasury and path to a public company. This firm's endorsement is almost seen as explicit support from the Binance camp. In the VAPE project, it participated in the early screening of shell companies, assisted in media coverage, and collaborated with some investors and the market making team to develop a narrative strategy of "position building, exposure, and valuation derivation."
The biggest feature of this capital structure arrangement is that VAPE is no longer the creator of value itself, but is designed as an intermediary platform for value release. 10X Capital provides structure and rhythm, YZi Labs provides narrative and channel, and BNB is embedded as the basic asset. The three together completed a closed-loop design from the asset end to the market end.
Whether this story holds true ultimately depends on whether on-chain positions can be cashed out and whether market confidence can be sustained. For most retail investors and bystanders, the emergence of VAPE isn't the end, but rather the prelude to the accelerated arrival of the "era of structural arbitrage."
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In a conversation between investors circulating on Telegram, someone made a calculation: the active capital available for VC and liquidity fund allocation in the entire crypto industry may be only $7-15 billion. The maximum estimated financing of VAPE's PIPE round is $1.25 billion, which will absorb about 5-10% of the industry's investable capital in extreme cases.
“I’ve never seen a non-BTC/ETH/SOL project siphon off so much money in a single deal,” he said. “And this company will probably never recycle this money back into the industry.”
This is not only a risk issue of excessive capital concentration, but also means that the already tight liquidity in the crypto industry is being "siphoned off" by an unverified model.
In the bull market, liquidity should be used to activate diversified innovation and provide flexibility for early projects such as DeFi, payment, and infrastructure. Today, these funds are concentrated on a "story shell" with a nested PIPE structure and shell resource speculation. If VAPE succeeds, it will certainly replicate more encrypted versions of MicroStrategy; but if it fails, it may become a typical example of industry-level resource mismatch.
Capital can write narratives and create bubbles. At the intersection of crypto finance, everything looks like a victory for structural arbitrage, until the moment when liquidity is completely exhausted, it is known whether there is "blood-making ability".
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