Nasdaq-listed Chinese electric vehicle charging firm Jiuzi Holdings has approved a crypto asset investment policy, authorizing the company to invest up to $1 billion in cryptocurrencies, with an initial focus on Bitcoin (BTC), Ethereum (ETH), and Binance Coin (BNB). The board of directors greenlit the plan, which is framed as a long-term treasury strategy to hedge against macroeconomic uncertainties.
However, the company's financials cast doubt on the feasibility of this move. According to its latest SEC filing, Jiuzi Holdings had only $943,000 in cash and cash equivalents as of October 31, 2024, and reported a net loss of approximately $55 million for the fiscal year. There is no clear indication of how the firm intends to raise the funds for such purchases.
The announcement triggered volatile trading in Jiuzi's stock (JZXN), which initially surged 47% to $2.38 before retracing completely. Shares were down nearly 10% on the day, trading at $1.46, and have declined over 99.9% in the past five years.
CEO Tao Li stated, "Adopting the crypto asset investment policy represents a proactive step in our treasury management to safeguard and enhance long-term shareholder value." Newly appointed COO Dr. Doug Buerger emphasized, "We are not engaging in short-term trading or speculation; rather, we view crypto assets as long-term stores of value." The firm will not take custody of the assets and has established a risk committee to oversee the strategy.