Summary TON Strategy offers a unique, highly speculative opportunity as the only public vehicle for exposure to Toncoin and its exclusive Telegram integration. TONX benefits from emerging use cases within Telegram's vast user base, world-class leadership, backing from top-tier VCs, and a clean, unlevered balance sheet. Shares trade at a steep 67% discount to NAV, with potential value accretion via capital allocation, stock buybacks, and staking revenue opportunities. Despite compelling upside, TONX remains high-risk due to early-stage adoption, crypto market volatility, and regulatory scrutiny; position sizing should reflect this risk. Introduction I am and have always been a crypto skeptic. I have never owned a cryptocurrency. My only exposure to the crypto sector has been via an investment in the largest US crypto exchange, Coinbase (NASDAQ: COIN ), which has returned over 40% pa since 2022. However, this investment was based more on the intrinsic operating leverage within brokerage businesses and a bargain basement valuation in 2022 vs. deep rooted conviction in the growth potential of crypto as an asset class. Despite my inherent skepticism of crypto, I recently initiated a starter position in TON Strategy Company (TONX). TON Strategy is a crypto treasury company for Toncoin, the native token of The Open Network (TON) - a layer-1 blockchain (like Ethereum or Solana) - that has an exclusive integration with the global messaging app Telegram. Shares in TON Strategy have been on a wild ride over the past six months as the business has transitioned from a small legacy public company (Verb Technology) into a crypto treasury company. Shares are down 90% from their 52-week high in August 2025, presenting an opportunity for contrarian investors. Data by YCharts Why I Bought Shares Below I detail why I was able to gain conviction to buy shares in TON Strategy, despite my inherent skepticism of the crypto industry. 1) Exclusive Telegram Partnership = Unmatched Distribution Advantages The first thing that stood out to me about Toncoin was their exclusive partnership with Telegram. Below are some interesting statistics about Telegram, taken from a range of public interviews and podcasts with TON Strategy's Executive Chairman, Manuel Stotz: 2nd largest global messaging platform and the 6th largest mobile app globally Largest mobile app outside of the USA and China Has over 1 billion monthly active users (expected to grow to 1.5 billion users over the next three years) Has over 500 million daily active users 80% of users are based in emerging or frontier markets Telegram Monthly Active Users (Backlinko) Telegram is an enormous company that rivals some of the largest US and Chinese tech companies for distribution and reach. If even 1% of Telegram's monthly active users used Toncoin for peer-to-peer payments, user numbers would already exceed those of most other cryptocurrencies. Interestingly, Telegram is 100% owned by its founder (Pavel Durov) and has never raised external capital. Instead, Durov funded Telegram by selling down his longstanding personal stake in Bitcoin. What makes Toncoin's partnership with Telegram most interesting is how it flips the growth equation for Toncoin. Most cryptocurrencies start with a product and then look for distribution, but Toncoin is the reverse - it starts with strong distribution via Telegram's base of 1 billion monthly active users. Over time, Toncoin will look to build a compelling suite of products to service the Telegram network. 2) Early, but Emerging Use Cases One of my longstanding criticisms of cryptocurrencies has been the limited number of practical use cases (anyone remember monkey artwork NFTs?). Right now, Toncoin is building out several use cases that have potential and make logical sense but are far from established. In short, the bet is that Toncoin will attract enough developer and investor attention to create genuine use cases within Telegram. Current emerging use cases for Toncoin include: Supporting peer-to-peer payments via Telegram's in-built customer wallet (similar to a Venmo feature in the US) Sending gifts to other Telegram users Acting as the currency for Telegram's mini-app ecosystem (where developers can build apps natively within Telegram) Acting as the currency for businesses to advertise on Telegram (Telegram's core revenue stream in addition to paid subscriptions for premium messaging features) In short, Toncoin's use cases are very early, but they have in-built distribution via their exclusive partnership with Telegram. 3) A High-Pedigree Executive Chairman A big part of my thesis for TON Strategy is its Executive Chairman, Manuel Stotz. Stotz has a strong finance pedigree: he received a full scholarship to study at the London School of Economics, had internships at prestigious investment firms like Blackstone (NYSE: BX ) and AKO Capital, and worked in the principal investments team at Goldman Sachs (NYSE: GS ). After leaving Goldman Sachs, Stotz built and scaled a multi-asset investment firm (Kingsway Capital) to US$5b AUM. Kingsway invests primarily in frontier markets like Pakistan, Bangladesh, and Nigeria, and offers a range of asset classes, including public equities, venture capital, and cryptocurrencies. Manuel Stotz Podcast (Blockchain Podcast) Stotz is a classic insider with blue-chip finance experience who has little incentive to go against the grain. He credited his interest in crypto (starting with Bitcoin but eventually leading to Toncoin) after seeing his investments at Kingsway Capital in frontier markets suffer from exposure to volatile and rapidly depreciating currencies. While leading Kingsway Capital, Stotz became the biggest investor in Toncoin, which led him to become Chairman of the Ton Foundation and, in recent months, Executive Chairman of TON Strategy. I've listened to all public interviews on Stotz and would highly recommend this interview on Blockchain and this interview on The Block . Stotz appears highly intelligent and a logical thinker who is aware of the limitations of crypto. He acknowledges that most cryptocurrencies will likely go to 0 but that Toncoin - due to their unique distribution advantages with Telegram - has the potential to become one of the few cryptocurrencies that matter. 4) Backed By Top-Tier Venture Capital Investors In my day job, I work as a venture capitalist, so I was surprised to see in a March 2025 announcement that a number of top tier venture capital firms had directly invested into Toncoin (the cryptocurrency, not TON Strategy, the holdings company). These investors included: Sequoia Capital Benchmark Ribbit Capital (specialist fintech investor) Draper Associates What is most interesting about this external investor validation is: All investors quoted in the article were high profile senior partners or founders of these investment firms Toncoin's price is down at least 30% since March 2025 (depending on when these investors bought Toncoin within the month) Most of these investors pulled back from crypto investments after the mania (and crash) of 2021/2022, so the fact that they backed Toncoin directly is a notable signal Toncoin Investor Quotes (Ton Foundation Blog) 5) An Attractive Permanent Capital Structure TON Strategy is essentially a holdings company with the sole purpose of purchasing and holding Toncoin, benefiting from price appreciation in the underlying cryptocurrency and associated staking revenues. In August 2025, TON Strategy raised a $558 million PIPE offering to build their Toncoin holdings. Most of this capital was used to acquire Toncoin with about $54 million kept on the balance sheet as cash or restricted cash. TON Strategy's permanent capital structure is highly attractive and, if executed well, could lead to higher returns for public markets investors in TON Strategy than investors in Toncoin itself. If shares trade at a premium to NAV (the total value of Toncoin on their balance sheet), TON Strategy can issue more shares at this premium and use the cash to purchase additional Toncoin at its market price. If shares trade at a discount to NAV (which is currently the case), TON Strategy can use excess cash and cash generated from staking to buy back shares at a discount to NAV. In Q3 2025, we saw TON Strategy repurchase over 2 million shares, which is over 3% of shares issued in their PIPE offering. The company has a $250 million stock repurchase program lined up with Cantor Fitzgerald to execute as management sees fit. 6) Clean Balance Sheet TON Strategy has a very clean balance sheet. The company has $54 million of cash (including restricted cash) and no debt. There is minimal goodwill and no material liabilities. Stotz has stated publicly that TON Strategy will not use any 'hard leverage' (i.e., debt or convertible notes), which helps to de-risk the capital structure for equity investors. 7) Staking Revenues Provide Additional Upside From my perspective, the core driver of future returns in TON Strategy will come from appreciation in the market price of Toncoin, so an investor would need to get conviction there is some fundamental reason why Toncoin should appreciate in price over the coming years. The exclusive partnership with Telegram and emerging use cases (including payments) are my anchor points, but other investors may disagree or have other takes. TON Strategy also has another potential revenue stream from staking. In simplistic terms, TON Strategy can lock up their Toncoin to a validator on the Toncoin network who then verifies and secures the network and compensates TON Strategy in the form of more Toncoin. In a sense, this process works like a yield on a bond or deposit, albeit with more risk. Current Toncoin staking rates are around the 3-4% mark, and TON Strategy has staked over 80% of their Toncoin balance. Using a 4% staking yield and TON Strategy's current staked balance, staking could generate at least $7 million of annualised revenue. Staking Explained (Swyftx Learn) 8) Material Discount to NAV After coming to appreciate Stotz's vision for TON Strategy, the clincher for me to initiate a position was the large discount to NAV. As of 19 November 2025, TON Strategy has a market cap of $182 million. With $53.9 million of cash and no debt, TON Strategy has an enterprise value of $128.1 million. If we take TON Strategy's reported balance of Toncoin at 30 September 2025 of 217.8 million and the current Toncoin price of $1.79, we arrive at an estimated fair market value of $389.9 million of Toncoin. This means that TON Strategy's enterprise value is 33% of the fair market value (i.e., NAV) of their Toncoin. In other words, TON Strategy trades at a 67% discount to the value of their Toncoin on the balance sheet. Of course, some discount is warranted given that TON Strategy would not be able to liquidate their entire Toncoin balance (which represents just under 5% of all tokens in circulation) without materially affecting the price. However, this 67% discount is very high and reflects the market's skepticism for crypto-related businesses. Any narrowing of this discount provides substantial upside for equity investors. 9) Increasing Investor Access to Toncoin While I place little weight in an investment thesis on investor psychology or fund flows, it is notable that overnight Toncoin became available for trading on Coinbase , the largest crypto exchange in the US. This means that Toncoin can be traded across major US crypto exchanges, including Coinbase, Gemini ( NASDAQ: GEMI ), Kraken, and Robinhood ( NASDAQ: HOOD ), which may help to bolster investment demand. Risks TON Strategy is the most speculative and highest risk public company I have written about. As such, TON Strategy accounts for Core risks for the business include: General macro risks around crypto markets Toncoin's price is very volatile and can make quarter-to-quarter NAV results very noisy TON Strategy is a nascent company and only launched the treasury strategy in Q3 2025, so there is not a demonstrated track record of intelligent capital allocation Toncoin's use cases are very early and far from proven, with no guarantee of future customer adoption on the Telegram network. Telegram is a highly successful but controversial company that has attracted notable scrutiny from governments due to Durov's unwillingness to engage in political censorship, which may limit their user adoption in some markets Conclusion TON Strategy is a very unique company and the only publicly listed treasury holdings company for Toncoin. While I remain a strong crypto skeptic, it is hard to ignore the following: A very strong Executive Chairman (Manuel Stotz) who previously built a successful global investment firm Clear distribution advantages via their exclusive partnership with Telegram Emerging use cases The backing of top tier venture capital investors A clever permanent capital model that allows for value accretion via intelligent capital allocation (e.g., issuing shares at a premium to NAV, buying back shares at a discount to NAV) Clean balance sheet with no debt Trades at a 67% discount to the implied fair market value of their Toncoin holdings Despite these positives, there are material risks with an investment in TON Strategy, and an investor's portfolio allocation should be small to reflect these risks.
