Binance founder Changpeng Zhao’s YZi Labs has launched a push to reshape the board of a BNB-buying company it helped fund, arguing that management has presided over “destruction” of shareholder value.
In a regulatory filing on Monday, YZi Labs said it is seeking to roll back all bylaw amendments made since July, expand the size of CEA’s board, and install “our highly qualified nominees as directors.”
YZi told investors that these steps “are necessary to address the continued destruction of stockholder value at BNC and to ensure that the Company is being run in a manner consistent with your best interest.”
If a majority of outstanding shareholders approve the proposal, YZi — which previously branded itself as Zhao’s family office — would effectively gain control of the world’s largest publicly listed BNB (BNB) treasury company.
BNB maintains deep ties to Zhao and Binance, which reportedly holds the majority of the token’s circulating supply.
CEA shares have plunged since YZi’s involvement
CEA Industries (BNC) shares have fallen roughly 89% from their July 28 peak of $57.59 — the same day the Canadian vape company’s stock soared 550% after announcing its pivot to become the largest BNB treasury company.
The stock closed Monday at $6.47, down more than 10% on the day. It is now more than 20% lower year-to-date and trading beneath its pre-crypto-pivot levels.
YZi helped fund CEA’s $500 million private investment in public equity (PIPE) deal that closed in August — a transaction CEA promoted as key to “establishing the largest publicly listed BNB Chain digital asset treasury strategy in the world.”
CEA’s shift into crypto brought major changes to its leadership. David Namdar, CEO of investment firm 10X Capital, was appointed as CEA’s new chief executive, while several 10X Capital executives took seats on the company’s board.
But in its latest filing, YZi argued that CEA’s management has failed to keep investors informed, claiming there have been slow updates and “little to no media or marketing efforts” to promote the company. YZi further accused Namdar of showing a “lack of devotion and loyalty” to CEA, alleging he has promoted competing crypto treasury projects. The filing added that the reconstituted board “should explore the selection of a new CEO.”
CEA Industries did not immediately respond to a request for comment.
BNB slumps but still outperforms CEA
BNB — a token closely linked to Binance and used for various perks on the platform — is trading at a three-month low of $829. It has fallen nearly 40% since hitting an all-time high of $1,367 in mid-October, moving largely in step with the broader crypto downturn driven by macroeconomic pressures.
Even so, BNB remains up 17.8% year-to-date and is slightly down over the past 24 hours.
CEA Industries currently holds 515,054 BNB at an average purchase price of $851.29. That positioning has pushed its mNAV — the ratio of the company’s valuation to the value of its crypto holdings — down to 0.79x.
