Freight Technologies Inc. (NASDAQ: FRGT), a logistics management company focused on cross-border shipping between the U.S. and Mexico, announced on April 30, 2025, that it has become the first publicly traded company to adopt the Official Trump (CRYPTO: TRUMP) memecoin as a treasury reserve asset. The company secured an agreement for up to $20 million in convertible notes with an institutional investor, with the proceeds exclusively allocated to purchasing TRUMP tokens.
The initial tranche involves $1 million, with up to $19 million available in subsequent drawdowns, subject to certain conditions. CEO Javier Selgas stated that this move diversifies the company’s crypto treasury, which already includes Fetch.ai (FET) tokens valued at approximately $8 million as of April 29, 2025. Selgas also framed the investment as a way to advocate for “fair, balanced, and free trade” between the U.S. and Mexico, citing concerns about potential U.S.-Mexico trade tariffs that could disrupt the company’s operations.
Freight Technologies emphasizes its role in facilitating commerce, noting Mexico’s position as the U.S.’s top goods trading partner. However, the announcement sparked significant market backlash. Freight Technologies’ stock plunged 20% on May 1, 2025, closing at $0.9848, with an additional 3.53% drop in after-hours trading. The TRUMP memecoin itself was trading at $12.50 on May 2, 2025, down 4.73% in the last 24 hours and 83% from its all-time high, reflecting its volatility.
Critics, including some analysts, speculate that the investment may be an attempt to influence U.S. policy on tariffs rather than a purely financial decision, though the company’s press release does not explicitly request tariff exemptions. The TRUMP memecoin has faced broader controversy, with ethics experts and Democratic lawmakers raising concerns about conflicts of interest tied to President Trump’s involvement, including allegations of insider trading and potential “pump and dump” schemes.
A Reuters report noted that entities behind the coin earned nearly $100 million in trading fees, while many small traders incurred losses. This move mirrors strategies like MicroStrategy’s Bitcoin treasury but is riskier due to the memecoin’s speculative nature and lack of intrinsic value. The long-term viability of Freight Technologies’ investment remains uncertain, hinging on regulatory developments and market dynamics.
The decision by Freight Technologies Inc. to establish a TRUMP memecoin strategic reserve carries several implications across financial, operational, and geopolitical dimensions. The TRUMP memecoin is highly volatile, with an 83% drop from its all-time high and a 4.73% decline in the last 24 hours as of May 2, 2025. This exposes Freight Technologies to significant financial risk, especially compared to more established cryptocurrencies like Bitcoin or Ethereum. A further decline could erode the company’s treasury value.
The 20% stock plunge on May 1, 2025, and additional after-hours losses signal investor skepticism. This could increase the company’s cost of capital and limit access to future funding. The $20 million in convertible notes tied to TRUMP purchases introduces debt obligations. If the memecoin underperforms, servicing this debt could strain cash flows, especially for a company with a market cap of under $20 million.
Freight Technologies’ focus on logistics and cross-border shipping may be overshadowed by this speculative crypto venture. Investors and analysts on X have criticized the move as a pivot away from operational priorities, potentially undermining confidence in management. While the company frames the memecoin reserve as diversifying its $8 million Fetch.ai (FET) holdings, the speculative nature of both assets concentrates risk in volatile crypto markets rather than traditional safe-haven assets like bonds or cash.
CEO Javier Selgas linked the investment to advocating for “fair, balanced, and free trade” amid fears of U.S.-Mexico tariffs. This suggests a strategic attempt to align with or influence U.S. policy under the Trump administration. However, there’s no guarantee this will mitigate tariff risks, which could disrupt Freight Technologies’ core business given Mexico’s role as the U.S.’s top trading partner.
The TRUMP memecoin’s ties to President Trump have drawn scrutiny for potential conflicts of interest and insider trading allegations. Associating with a controversial asset could invite regulatory attention or reputational damage, particularly if lawmakers or ethics groups intensify investigations. Freight Technologies follows companies like MicroStrategy, which bolstered its valuation through Bitcoin reserves.
However, a memecoin reserve is unprecedented for a publicly traded company and may inspire similar speculative moves by others, potentially destabilizing smaller firms. Negative reactions on X and the stock drop suggest a broader market wariness of memecoin investments by traditional firms. This could limit Freight Technologies’ ability to attract institutional investors who prioritize stability.
The TRUMP memecoin’s structure, with high trading fees and allegations of market manipulation, could attract SEC attention. If classified as a security or linked to fraudulent activity, Freight Technologies’ investment could face legal challenges. As a company operating in U.S.-Mexico trade, any regulatory fallout could complicate its international operations, especially if Mexican authorities view the move skeptically.
Memecoins often rely on hype rather than fundamentals. A collapse in TRUMP’s value could wipe out the reserve’s worth, damaging Freight Technologies’ financial position and credibility. The company’s ability to pivot back to operational focus or liquidate its crypto holdings without significant losses will be critical. The convertible notes’ drawdown structure provides flexibility but also ties future funding to memecoin performance.
While Freight Technologies aims to diversify its treasury and possibly influence trade policy, the move introduces substantial financial, regulatory, and reputational risks. The strategy’s success depends on the TRUMP memecoin’s performance, U.S. trade policy developments, and the company’s ability to manage investor and market skepticism.
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