On October 27, Kingsway Capital, TON Strategy's (Nasdaq: TONX) largest shareholder with a 21.96% stake, sent a letter to the company's board of directors, criticizing that shares are trading at a 44% discount to the company's treasury asset value per share, with almost no repurchases. According to the August 4 report, only about a tenth of the $250 million share repurchase program announced in 2025 has been executed. The letter was signed by Manuel Stotz, former president of the TON Foundation and current executive chairman of the very board it addresses.
TON Strategy, formerly Verb Technology, is a public company that has held Gram (TON) coins in its treasury and staked them since August 2025. This news concerns its shareholders and anyone tracking major off-exchange Gram holders.
What the Letter Says
The letter was released as a press release and attached the same day to a SCHEDULE 13D/A filing – a major shareholder disclosure with the U.S. Securities and Exchange Commission (SEC). Key points:
- trading at such a discount is "unacceptable," and the board, in Kingsway's view, is not doing enough to increase shareholder value;
- Kingsway has not sold a single share since the 2025 private placement;
- the largest shareholder and the executive chairman of the board have been pushing for share repurchases at meetings throughout the year, and the company itself stated when announcing the program that repurchases were needed to increase net assets per share;
- given the 44% discount, it is unclear why repurchases are not being conducted more aggressively and why the board is not discussing the matter with sufficient focus.
Every share repurchased for less than the assets backing it increases the proportion of assets attributable to each remaining share – this arithmetic underpins the entire argument of the letter.
The letter sees the path to value growth in larger and faster share repurchases under the board's supervision, "closer to the interests of shareholders." It does not mention Gram sales, specific director candidates, or management changes.
The 13D/A filing itself is broader than the letter. In it, Kingsway reserves the right to seek changes to the board's composition, nominate candidates for the 2027 annual meeting or a special meeting, call such a meeting, discuss strategic alternatives, and buy or sell shares. It also states that Kingsway had previously raised the issue of shareholders' right to call special meetings with the board.
Where the 44% Discount Comes From
The metric cited in the letter is calculated by the company itself: the value of Gram on the balance sheet plus cash, divided by the number of shares and pre-funded warrants, based on the latest financial report. TON Strategy published the formula on September 8, 2025, which then yielded $11.90 per share.
| Metric | Value | Date |
|---|---|---|
| Gram on balance sheet | 231 million | company analytics |
| Cash | $29.0 million | same source |
| Shares and warrants in calculation | 58.2 million | as of June 30 |
| Gram price | ≈ $1.22 | October 26 |
| Assets per share | ≈ $5.3 | October 26 |
| Share price at close | $2.96 | October 26 |
| Discount per company data | 44% | October 26 |
The cost basis of Gram on the balance sheet is, on average, about $3.24 per coin, including coins contributed at placement and staking rewards: as of June 30, the balance sheet held 230,520,792 Gram with a cost basis of $747.0 million and a fair value of $369.5 million (10-Q quarterly report). The company has no loan debt; all liabilities total $5.0 million. Almost all Gram, 229,860,889 coins, is staked; in the second quarter, it generated 9.44 million Gram in rewards and $15.0 million in revenue.
How Much of the $250 Million Has Been Repurchased
The board approved the $250 million repurchase program on September 3, 2025.
- In 2025, 3,959,697 shares were repurchased for $20.58 million.
- No repurchases are reported for the first half of 2026.
- From July 1 to August 4, 2026 – 1,458,628 shares for $4.75 million. The company announced a two-month 10b5-1 plan – a pre-arranged program where a broker buys shares without daily company decisions – on July 1; purchases after August 4 will be disclosed in the third-quarter report.
In total, as of August 4, approximately 5.42 million shares worth about $25.3 million have been repurchased, representing a tenth of the program. In the same weeks, from July 1 to August 4, the company sold 3.65 million Gram for $5.77 million. Cash on hand as of June 30 was $28.8 million, against approximately $225 million remaining in the program's limit, and the company, according to its own report, finances operations with cash on hand and periodic Gram sales. Of the $369.5 million in Gram, $111.3 million is free from restrictions.
Shares outstanding as of August 4 were 55,071,989. Kingsway's stake increased from 19.93% to 21.96% mainly because repurchases reduced the number of shares: since August 2025, the fund has only purchased an additional 70,000 shares.
Kingsway and TON Strategy Before the Letter
Kingsway acquired shares in a private placement (PIPE) on August 7, 2025: at that time, TON Strategy issued 57,024,121 shares at $9.51 and pre-funded warrants for an additional 1,677,996 shares, raising approximately $558 million in cash, Gram, USDC, and USDT. Since then, Stotz has been the executive chairman of the board; he was re-elected as a director on June 9, 2026. He became president of the TON Foundation in January 2025 and left that post in August of the same year.
Relations between the parties deteriorated long before the letter:
- under a consulting agreement, the company paid Kingsway 2% of its market capitalization per year; payments ceased in March 2026, and on August 10, the company terminated the agreement;
- on April 2, a derivative lawsuit was filed alleging breaches of fiduciary duties, including related to this agreement and director compensation; defendants filed motions to dismiss on July 27;
- on July 30, investors advised by TOMS Capital filed a lawsuit in the New York State Supreme Court against the company, Kingsway, and Stotz himself, alleging misrepresentations in the 2025 placement;
- on June 18, Nasdaq issued a letter of reprimand to the company for issuing stock awards exceeding plan limits without shareholder consent.
In August, the board was expanded to six members. The company is led by CEO Kevin Wilson.
What Happened After the Letter
As of November 4, there has been no response from the board: after Kingsway's October 27 filing, the company has not submitted anything to the SEC, and there have been no press releases on its website since September. The third-quarter report and investor call are scheduled for November 10, 2026.
The share price (trading history) rose from $2.96 to $3.29 on the day of the letter, closed at $3.35 on October 28, and at $2.86 on November 3. Kingsway's stake was worth approximately $40 million at the October 28 price.
Shareholder pressure on companies with crypto treasuries has become a familiar narrative in 2025–2026: at ETHZilla, after an open letter from a shareholder, $40 million in ETH was sold for a buyback; at Empery Digital, a shareholder with a 9.8% stake in February 2026 demanded the sale of Bitcoin and a change in management, and the company later sold its Bitcoin. The peculiarity of TON Strategy is that the demand comes from the fund of its own board chairman, although the 13D/A filing emphasizes that Kingsway and Stotz are acting as shareholders.
Questions
How much Gram does TON Strategy hold?
As of June 30, 2026 – 230,520,792 Gram, according to the quarterly report; the company's analytics page currently shows 231 million. Almost the entire volume is staked.
Who is TON Strategy's largest shareholder?
Kingsway Capital: 12,091,720 shares, 21.96% as of October 27, 2026, plus a pre-funded warrant for an additional 401,133 shares.
What is TON Strategy's ticker?
TONX on the Nasdaq exchange. Before its renaming, the company was called Verb Technology.
