Shares of Upexi fell 8% on Tuesday after the company reported a wider-than-expected fiscal third-quarter net loss. The drop came alongside a disclosure that Upexi had increased its Solana cryptocurrency holdings to 2.5 million tokens, worth more than $238 million at current prices.
Why the stock slid
The company's net loss grew to $12.4 million in the quarter ended February 28, up from $8.1 million a year earlier. Revenue rose 12% to $45.3 million, but the bottom line missed analyst estimates. Investors reacted by selling off shares, pushing the stock to an intraday low of $4.12 before a slight recovery.
Upexi blamed the loss on higher operating expenses tied to acquisitions and a ramp-up in marketing. The company didn't break out the impact of its crypto holdings on earnings, but the disclosure came as a surprise to some traders who track corporate balance sheets.
A big bet on Solana
Upexi now holds 2.5 million Solana tokens, up from roughly 1.8 million at the end of the prior quarter. At Solana's current price of about $95, the stash is worth over $238 million — more than five times the company's own market capitalization of roughly $42 million.
That makes Upexi the second-largest listed corporate holder of Solana, trailing only Forward Industries, which holds just over 3 million tokens. The crypto investment represents a huge concentration of risk for a company with a relatively small equity value. Upexi didn't say how it acquired the additional tokens or whether it plans to hold or sell them.
The corporate crypto holders club
Public companies holding large crypto positions are rare. MicroStrategy's bitcoin bet is the best-known example, but Solana has attracted fewer corporate balance sheets. Forward Industries, a holding company with businesses in energy and crypto mining, remains the top Solana holder among listed firms. Upexi's move puts it in a select group that includes a handful of miners and blockchain-focused firms.
Upexi's core business is in consumer goods and e-commerce — not crypto. The company acquired a stake in a blockchain payment platform last year, but its primary revenue comes from selling vitamins and pet products online. The Solana holdings now dwarf the company's cash and equivalents, which stood at $4.7 million.
The widening loss and the crypto bet raise questions about how Upexi will fund future operations. For now, the stock is down 41% year-to-date, and the company faces a May 15 deadline to file its full annual report with the SEC.
