Hyperliquid approves $30 million buyback plan, HYPE token price under pressure

Source: TheCryptoUpdates Original Title: Original Link: https://www.thecryptoupdates.com/hyperliquid-rolls-out-30m-hype-buyback/

Background

Hyperliquid has just approved a $30 million share buyback plan, which is quite rare considering the company only went public a week ago. Most companies wait years before initiating buybacks, but Hyperliquid acted swiftly.

CEO David Schamis stated that the board wants to increase investors’ per-share exposure to the HYPE token through smart financial management. Essentially, they are boosting the value of remaining shareholders by buying back shares.

Company Background

The company was formed through a merger between healthcare technology firm Sonnet BioTherapeutics and SPAC Rorschach, backed by crypto investor Paradigm. The deal was originally set to close in November but was delayed due to insufficient preliminary shareholder approval. The transaction was ultimately completed on December 3, and the company was listed on Nasdaq under the ticker PURR, with an initial share price of $3.64.

Token Strategy and Investor Support

Hyperliquid Strategies plans to stake most of its HYPE token holdings or deploy capital into yield-generating DeFi activities. The company also enjoys strong backing: D1 Capital, Galaxy Digital, Pantera Capital, and former Barclays CEO Bob Diamond as chairman.

Unique Token Distribution Model

The underlying Hyperliquid protocol took an unusual approach by not raising venture capital. Instead, when it launched at the end of 2023, it airdropped one-third of its total supply (worth $1.2 billion) directly to early users. The native HYPE token is currently trading around $29, a significant drop from its September high of $59.30.

Summary

Hyperliquid’s rapid $30 million buyback aims to boost the value of the HYPE token, backed by major investors, following its unusual VC-free launch and merger-driven public listing.