Summary Forward Industries has become the largest Solana DAT, acquiring over 6.8 million SOL after a $1.65B PIPE investment. FORD's pivot to Solana follows years of declining revenues and negative net income, with its SOL holdings now exceeding $1.58B in value. Despite staking SOL for a 6.8% yield, FORD trades at over 30x forward sales, suggesting the stock is significantly overvalued at current prices. I rate FORD as a 'hold,' preferring a moderate premium to the PIPE price over the current ~$40 share price for SOL exposure. As I laid out in my recent Solana ( SOL-USD ) piece highlighting the impending SOL purchases through public equities, we have a new leader in the race to be the biggest Solana DAT, or Digital Asset Treasury company. That crown is currently worn by Forward Industries (FORD), which recently purchased over 6.8 million SOL tokens following a PIPE investment from Multicoin Capital, Galaxy Digital (GLXY), and Jump Crypto. In this piece, we'll look at some of the key details of those investments and assess whether FORD shares are a 'buy,' 'hold,' or 'sell' at the present time. Forward Industries As has often been the case in some of the more recent examples from the DAT craze this summer, the public companies that transition to the DAT model often have very little in the way of assets or profitable business lines prior to shifting to crypto. Such is the case for Forward Industries, which previously operated a product design business for medical and technology companies. Data by YCharts In addition to declining revenues going back at least the last 3 years, Forward Industries has had negative net income for 7 consecutive quarters. Thus, a timely pivot to Solana was aided by a massive capital raise. The PIPE Through a private investment in public equity, or PIPE, Forward Industries was able to raise approximately $1.65 billion from various investors at a price of $18.50 per share. The proceeds from that PIPE were to purchase Solana for the company's SOL strategy. On September 15th, the company announced over 6.8 million SOL tokens purchased with the proceeds from that PIPE. That amount of SOL currently makes Forward Industries the largest Solana DAT by a wide margin. In fact, not including Helius Medical Technologies (HSDT), which is also raising millions of dollars for a SOL treasury, Forward Industries has a bigger SOL balance than the previous 8 SOL DAT companies combined: Entities Total Solana Market Value DeFi Development Corp. ( DFDV ) 2,027,817 $470,453,544 Upexi ( UPXI ) 2,018,419 $468,273,208 Sharps Technology ( STSS ) 2,000,000 $464,000,000 Sol Strategies ( STKE ) 370,420 $85,937,440 BIT Mining Limited ( BTCM ) 44,412 $10,303,584 Exodus Movement ( EXOD ) 43,738 $10,147,216 Torrent Capital ( OTCPK:TRRPF ) 40,039 $9,289,048 Lion Group Holding ( LGHL ) 6,629 $1,537,928 Combined 6,551,474 Forward Industries 6,822,000 $1,582,704,000 Source: CoinGecko, values at $232 SOL price Subsequent to the PIPE, Forward Industries raised another $32.9 million through a direct investment at $18.50 per share. Per that prospectus , there are now 84,527,120 shares outstanding. This is an important number because it implies an equity valuation of $3.3 billion at a $39 closing price on September 15th. Should the company really be worth that much? I'm not convinced. Valuation Given the company's $3.3 billion valuation relative to the $1.6 billion SOL that the company holds, it would be fair to call FORD overvalued at a 2x mNAV multiple if it were a DAT that held a non-productive asset. However, the company has put the SOL to work through native staking. Meaning, these tokens do generate a yield on top of any price appreciation that they might produce. 1 yr Solana APYs ( Staking Rewards ) Presently, staked Solana generates 6.8% annually. Keep in mind, as more Solana is purchased and subsequently staked for income, the yields from staking come down, similar to how a bond yield would come down when the price of the bond increases. But at 6.8%, we can at least model a price-to-sales multiple for FORD based on expected annual revenue from staking. Current SOL holdings: $1,582,704,000 Staking Yield 6.8% Annualized revenue $107,623,872 Market Capitalization $3,296,557,680 FWD P/S Multiple 30.63 Source: Author's calculations Assuming the staking yield stays the same and the price of SOL doesn't deviate from current levels, FORD is trading at over 30x forward sales. To be sure, there are other things that the company can do to maximize returns for shareholders. It could take SOL out of stake and instead put it into riskier, higher-yield DeFi protocols. It could make investments in companies that build on and grow the Solana ecosystem as well. But, before any of that happens, FORD is probably overpriced at $39 per share. Closing Thoughts It is a very interesting time in the digital asset markets. Publicly listed companies are essentially competing with ETFs and other asset managers for capital to put into the blockchain ecosystem. Part of what makes the share price gains in these smaller cap companies so explosive is that the floats are so small. For example, prior to the PIPE, there were slightly more than 1 million FORD shares outstanding. Now that number is closer to 85 million shares, but the overwhelming majority of them are temporarily locked up. You could talk me into FORD at a moderate premium to the PIPE offering price of $18.50. At closer to $40, I would find alternative ways to get exposure to SOL. I'll initiate with a 'hold.'
