Changpeng Zhao-backed investment company YZi Labs harshly criticized the management of CEA Industries, which is traded on Nasdaq, and announced that the company was taking steps to protect the current management and weaken shareholder rights. on wednesday X In the post shared on , it was stated that CEA’s defense mechanism, known as the “poison pill”, and the amendments to the articles of association prevented investors from acting through written approval. It was emphasized that the process, which started with a promising partnership five months ago, turned into an open power struggle over board control. At the center of the debate is the mismatch between CEA’s strategic direction and company performance
Background of the Board Struggle
The tension began with YZi Labs’ aggressive moves to change the board structure at CEA Industries last month. The investment company requested the expansion of the board of directors, the reversal of the recent articles of association and the appointment of its own list of candidates through written approval. These steps were considered as a clear indication of the aim of having a more direct say over the company.
YZi Labs also revealed its intention to increase its stake in the company by making a formal application to form a coordinated shareholder group. The company argued that CEA’s performance remained weak following the completion of a $500 million private equity investment in July. In the statement, it was stated that the company’s basic strategy did not progress in line with BNB, which is its balance sheet asset, but the price of the altcoin showed a strong increase in the same period.
The AI front claimed that the management did not draw a direction that would meet investor expectations despite this situation, and stated that managerial change had become necessary.
Poison Pill and Shareholder Reaction
CEA Industries’ board of directors adopted a limited-term shareholder rights plan in response to YZi Labs’ moves. This mechanism, referred to as the “poison pill,” comes into play if any individual or group reaches 15 percent or more of the company’s shares without management approval. Under the plan, other shareholders are given the right to buy new shares at a 50 percent discount, significantly increasing the cost of a rapid change of control.
YZi Labs described these regulations as shareholder-unfriendly practices. The company argued that the new articles of association made the written approval process virtually dysfunctional and limited investor will. It was also stated that CEA CEO David Namdar’s mention of the possibility of turning to different altcoins such as Solana instead of BNB created concern among shareholders who invested in the BNB strategy.
