Chinese EV Firm’s Stock Soars, Then Plunges After $1 Billion Crypto Investment Plan

Jiuzi Holdings, a publicly traded electric vehicle charging company, has unveiled an ambitious plan to build a $1 billion crypto treasury focused on Bitcoin, Ethereum, and BNB. The announcement, however, sparked mixed reactions among investors.

Immediately after the news, JZXN shares skyrocketed to $2.38, up 47% from the previous day’s close. But the excitement quickly faded as the stock dropped to $1.46, down nearly 10% on the day and losing more than 99.9% of its value over the past five years.

CEO Tao Li stated:

“Adopting the crypto asset investment policy is a proactive step in treasury management to safeguard and enhance long-term shareholder value.”

According to the plan, Jiuzi Holdings will allocate part of its cash reserves to BTC, ETH, and BNB, under a strict risk management framework. Any expansion into other crypto assets would require board approval.

Yet, a striking paradox remains: in its latest SEC filing, as of October 31, 2024, Jiuzi reported holding only $943,000 in cash and cash equivalents, while posting a net loss of $55 million for the fiscal year. This raises serious questions about how the company intends to fund a potential $1 billion crypto purchase.

The firm also clarified that it will not take direct custody of its digital assets. Instead, it has established a crypto risk management committee to oversee the strategy. Jiuzi further emphasized that it is not engaging in short-term trading or speculation but views top-tier crypto assets as “long-term stores of value to hedge against macroeconomic uncertainty,” according to newly appointed COO Doug Buerger.