TL;DR
- YZi Labs blasted CEA Industries for adopting a poison pill and bylaw changes it says restrict written-consent action by shareholders.
- After YZi sought board expansion and filed to form a coordinated stockholder group, CEA set a 15% trigger that grants others a 50% discount on shares.
- YZi cited post-July underperformance versus BNB, warned about meeting delays and strategy drift, and called for constructive dialogue to protect shareholders.
YZi Labs, the Changpeng Zhao-backed investment firm, is publicly criticizing Nasdaq-listed CEA Industries for adopting defenses it says restrict stockholder rights. In a post on X, YZi argued that CEA’s poison pill and bylaw changes are shareholder-restrictive measures meant to block investors from acting by written consent. The dispute marks a sharp turn from what looked like a cooperative relationship just five months ago, following CEA’s pivot and a $500 million private placement. Now, governance is the headline, with YZi pressing for influence and CEA moving to fortify board control further at all.
— YZi Labs (@yzilabs) January 7, 2026
Poison Pill Deepens the Boardroom Conflict
The conflict erupted last month when YZi filed for sweeping board changes, including expanding the board, unwinding recent bylaw revisions, and installing its own director slate through a written-consent process. It later filed to form a coordinated stockholder group to increase its stake and amplify its leverage in the process, seeking more direct oversight across the investor base. YZi says the company’s performance since the July financing has been weak, arguing CEA has failed to reflect the treasury strategy at its core even as BNB’s gains stood out during the same stretch.
CEA’s board responded by adopting a limited-duration stockholder rights plan, commonly known as a poison pill, and amending bylaws in the wake of YZi’s moves. Under the rights plan, the mechanism triggers if any person or group acquires 15% or more of outstanding shares without board approval. If triggered, other shareholders can purchase additional shares at a 50% discount, creating immediate dilution and making a takeover prohibitively expensive, while discouraging rapid accumulation of control. YZi says the structure is built to entrench current management and to frustrate consent solicitation efforts outright.
YZi also voiced concern about strategy drift, saying CEO David Namdar made comments that CEA had considered switching to other crypto assets, including Solana, which worried investors backing a BNB-focused approach. The firm accused CEA of delaying its 2025 annual meeting beyond its Dec. 17 anniversary and warned against “manipulative behavior” tied to scheduling or director nominations. Ella Zhang, head of YZi Labs, said it will stay committed to constructive dialogue while protecting shareholders and the BNB ecosystem. CEA shares closed up 1.56% at $6.51 but are down 36.67% in six months, while BNB rose 38%.
