TL;DR
- Sonnet will merge its business with Rorschach I LLC to form Hyperliquid Strategies Inc., a publicly traded company that will manage one of the largest public HYPE token reserves.
- The deal includes $305 million in cash and 12.6 million HYPE tokens, backed by investors such as Paradigm, Pantera, and Galaxy Digital.
- Sonnet will remain a subsidiary and allocate $5.5 million to fund its biotech operations as the merger moves forward, with completion expected in the second half of 2025.
Sonnet BioTherapeutics has announced the signing of an agreement to merge with Rorschach I LLC and create Hyperliquid Strategies Inc., a public company that will manage a strategic reserve of HYPE tokens.
The Hidden Potential of HYPE
The deal, valued at $888 million, combines $305 million in cash and 12.6 million HYPE tokens, the native asset of Hyperliquid — a blockchain focused on perpetual derivatives that surpassed $1.5 trillion in trading volume over the past year.
The new entity will continue to trade on Nasdaq under a new ticker and will become the largest publicly listed U.S. company to hold HYPE in its treasury. It plans to expand its holdings through additional purchases financed with the capital raised from the merger.
The agreement is backed by investors such as Paradigm, Galaxy Digital, Pantera Capital, D1 Capital, Republic Digital, and 683 Capital. Paradigm emphasized Hyperliquid’s rapid growth and the unmet institutional demand for HYPE in the U.S., where access remains limited. The strategy seeks to capitalize on the token’s strengths and make it more accessible through the public markets.
Atlas Merchant Capital, which created Rorschach I LLC, will take charge of managing Hyperliquid Strategies. Bob Diamond, co-founder and CEO of Atlas, will serve as chairman, while fellow co-founder David Schamis will take over as CEO. The board will also include Eric Rosengren, former president of the Boston Federal Reserve, along with two of Sonnet’s independent directors.
What’s Next for Sonnet?
Sonnet will continue as a subsidiary, focusing on its existing assets and pursuing licensing or sale agreements for its development portfolio. Shareholders will receive a contingent value right (CVR) entitling them to potential future payments if those assets generate revenue.
Before the deal closes, Sonnet will carry out a $5.5 million private placement of convertible preferred shares and warrants, with proceeds going toward transaction costs and ongoing operations. The merger is expected to close in the second half of 2025, subject to shareholder approval and regulatory conditions
