🚨 HYPE DAT alert $SONN, a potential #HYPE DAT pending merger, was up 42% yesterday The stock traded $6.1M in volume, 37% higher than their 3 month average Does the market know something? 🧵

1. On July 11 Sonnet BioTherapeutics entered into a merger agreement with Rorschach I LLC, a SPAC, to form a combined entity called Hyperliquid Strategies under a new ticker $PURR. As part of the merger, Rorschach would contribute 12.6M in HYPE tokens and $305M in cash, with an approx. value of $888M at closing. Note that these tokens were not bought at the open market, but already held by Rorschach.

2. On October 23rd, news broke that Hyperliquid Strategies was looking to raise $1B to acquire more HYPE. The filed S1 states that "We may receive up to $1.0 billion in aggregate gross proceeds from Chardan under the Purchase Agreement". The amount of capital raised could vary, but we can expect at least 25% within a few months depending on market sentiment.

3. If we assume that Hype Strategies can raise 250M initially, using todays price of $40.5, they could purchase 6.17M HYPE. The combined entity would hold ~18.8M HYPE, which would be around 4% of the total outstanding native supply of HYPE. The tokens are expected to be staked and generate staking rewards

4. However, all of this hinges on the merger with Rorschach being approved during the $SONN shareholder meeting on Nov. 18. Even the $1B share offering cannot begin if the merger doesn't go through.

5. YTD HYPE has bought back 22.7M tokens, nearly 3.9% of the total native supply of 579.6M. If this closes, we could see a parabolic move for HYPE due to the combination of DAT purchases & protocol buybacks. We have not yet seen this supply dynamic with other major BTC, ETH & SOL DATs.

6. What does this mean for investors? Mark 11/18 on your calendar and watch closely how $SONN trades. If approved, Hyperliquid Strategies would be the largest HYPE DAT holding one of the best fundamentals driven project in crypto. They are currently trading above mNAV while the DAT sector is compressing. Regardless of what you think about DATs, this is bullish HYPE