I recently came across a rather eye-catching piece of news: a certain crypto company's stock price has been halved again and again, now only down by 95%, with a market cap shrinking to over $100 million, yet they are planning to raise $10 billion. The most absurd part is that this company still holds 2 million SOL tokens on its balance sheet. At first glance, these numbers look like a pie in the sky—on the brink of bankruptcy + massive crypto assets + huge fundraising needs, all mixed together, making it dizzying to look at.

For investors, this is indeed a dilemma. On one hand, such a low market cap seems like a good opportunity for a bargain. On the other hand, the fundraising amount far exceeds the market cap itself, which doesn’t make sense no matter how you look at it. Is the company truly desperate and seeking a lifeline, or is it setting a trap for retail investors? Ultimately, the seemingly insignificant details behind these numbers are the easiest places for people to lose money.

First, let’s look at why the stock price could have fallen so dramatically. From a 95% decline, it’s clear that the market is thoroughly disappointed with this company. Stock prices don’t crash without reason; there must be serious issues behind it. The core business might be burning cash continuously, market share shrinking rapidly, there could have been major management changes, or even compliance risks. In other words, the market has already voted with its feet. Against this backdrop, the company suddenly announces a plan to raise 100 billion, which is quite interesting. It’s unlikely to be for "business development"; a more realistic explanation is that the cash flow is about to run out, and they’re rushing to raise funds to "bridge the gap," buying time to delay a potential collapse.

That 2 million SOL tokens are particularly intriguing. This asset is indeed valuable, but it also becomes the best "bait." The company uses it to create an illusion—look, we have so many high-quality crypto assets, so our prospects should be good, right? Little do they realize, this actually reveals the core problem. If the company were truly well-managed and had bright prospects, why would it need to use its assets to raise funds? A normal company would attract investors with future earnings, not use its existing assets as collateral. Reversing this logic implies: the company has no other options left.

From an investor’s perspective, the most dangerous aspect of such fundraising is information asymmetry. The company holds internal data about its true operations and knows exactly how dire its situation is, while investors only see the surface numbers. A 100 billion fundraising might seem huge, but when divided among individual investors, the risk is also spread out—this is good for the company but potentially amplifies losses for investors. Moreover, if the fundraising succeeds, the use of these funds should be closely monitored. Are they used to develop new business or to pay off debts? If most of the money flows to creditors, investors are essentially paying for the company’s past mess.

Another angle that cannot be ignored: why raise funds now? At a time when the stock price has already fallen so badly, every dollar of fundraising means more dilution of shares. This usually indicates that the company lacks patience and doesn’t want to wait for the stock to rebound, but is eager to get cash at any cost. This sense of urgency itself is a warning sign. A truly confident company would wait for a better opportunity; a company that has lost hope would be in such a rush.

So, returning to the initial question: is this a life-saving straw or a trap to harvest retail investors? The answer might be both. For the company, fundraising is a lifeline; for investors, it could very well be a trap. Unless one can deeply understand the company’s real operations, the specific use of the funds, and the management’s actual plans, it’s hard to find sufficient reasons to believe this story based solely on these surface numbers. In the crypto market, the combination of low price and massive assets is sometimes not an opportunity but a warning light for risk.