Summary MCVT's stock surged after shifting to a crypto treasury strategy focused on SUI, supported by a $450M private placement and $500M equity line. The company now generates revenue from staking its $300M SUI holdings, but future revenue opportunities remain uncertain and depend on execution. Risks include shareholder dilution and the speculative nature of crypto assets, especially with shares trading at a premium to NAV. Given the early stage and premium valuation, I rate MCVT as a Hold and recommend monitoring future quarters for clarity on the treasury model. Mill City Ventures III, Ltd. ( MCVT ) had an unexpected rally in its stock price this summer. MCVT 1M Price History (Seeking Alpha) Up about 4X over the past month, MCVT is another company that has adopted a crypto treasury strategy, this time for SUI ( SUI-USD ). Not even a full-month into it, a lot remains to be seen. For now, the premium to NAV precludes a Buy rating. Old Business Prior to the shift, MCVT was a Minnesota-based, non-bank lender. They primarily made money by issuing high-interest, short-term loans. Portfolio of Investments (2024 Form 10K) With a small base of capital, these loans were usually just invested in a handful of positions. Similarly, they didn't generate significant revenue. Income Statement (Q2 2025 Form 10Q) For the six months ended June, this year and last, investment income only came to about $1.7M, up about $1M after operating expenses. MCVT's market cap of $599M market cap therefore cannot be explained by small-scale, compound interest. Shift To SUI Treasury The rally in MCVT's price occurred upon the announcement of a $450M private placement of new shares, at $5.42 per share. A $500M equity line was also announced at the start of August. Already, MCVT is the biggest it's ever been. In the first release, they explained their purpose with these moves: We're launching at a pivotal moment when both institutional crypto and AI are reaching critical mass — creating significant opportunities across blockchain infrastructure,” said Stephen Mackintosh , the proposed Chief Investment Officer of Mill City and General Partner at Karatage. “We believe that Sui is well positioned for mass adoption with the speed and efficiency institutions require for crypto at scale, plus the technical architecture capable of supporting AI workloads while maintaining security and decentralization. In essence, the move was something like a SPAC merger, but the legacy lending business will remain in operation. This capitalization occurred with funds from Karatage, which has had a strategic partnership with Mysten Labs, the group that created the SUI network. The other half of the funds came from the Sui Foundation, which is independent from the Sui network but whose mission is to promote it. August 11 Press Release As recently as August 11, the company announced that they had purchased 81.8M SUI. With just over $300M in SUI, nearly all of which is being staked, the company is currently producing SUI yield with it. This yield is about 3%, which the company says comes to about $26K daily. The logic of the transition is simple: it hopes to generate revenue from staking, as well as investment returns from its SUI holdings over time. Future Outlook SUI makes the SUI network (a blockchain platform similar to Ethereum) run, covering transaction fees and giving holders voting power proportionate to their holdings, which can dictate how the network runs and evolves over time. These two things give it potential to grow in value over time. As the primary holding now, this would benefit MCVT over time. Beyond the revenue of its staking, it remains to be seen how much MCVT (or any crypto treasury) can leverage its large position into other revenue opportunities. One might hope that, being a non-bank lender, they have the insight to create financial products based in crypto. It will take future quarters to consider what revenues they are capable of making, but 3% of their recent holdings is about $9.5M in SUI, plus any interest on their USD cash position. With their Q2 results , the company expressed the following about the shift: SUI is a next-generation Layer 1 blockchain designed to deliver the scalability, speed, and security required to power decentralized applications and real-world crypto use cases across finance, gaming, artificial intelligence, stablecoins, and more. Its horizontally scalable architecture, low-latency finality, and secure, developer-friendly design, position it as a leading infrastructure platform capable of handling real-world scale. As institutional and consumer adoption accelerates, SUI offers the potential to enable a wide range of transformative digital experiences and create long-term value opportunities for Mill City and its shareholders. If we look at other crypto treasuries as a model, there is risk of shareholder dilution, given the equity line that was established. Convertible securities, that come with a fixed-income obligation for MCVT, may also be introduced. At this moment, the potential for peculiar financing is one of the greatest risk factors that I can foresee, beyond the speculative nature of a crypto asset. I think one needs a good entry price, ideally, at or below NAV. During their announcement on August 11, they noted shares traded at a premium to NAV, a ratio of about 1.15. SUI vs. MCVT Recent Returns (Seeking Alpha) If we look above, MCVT has appreciated considerably, while SUI has not. The premium, therefore, has increased. For now, dips below $5.50 suggest a move into undervaluation. With more financing likely on the horizon, the exact NAV at any given moment will be a moving target. Investors looking for an entry price should keep that in mind. Conclusion With it being early, it's tough to be too cautious or optimistic about it. I put the stock in a fair value range and think a neutral Hold rating is best at this point. It's worth watching as Q3 and Q4 finish and release their results, to get a better idea of everything they have in mind with the treasury model.
