How will the $120M IP token allocation affect the dilution of existing CASK shareholders?

The $120 million IP‑token reserve is being issued as part of the $220 million private‑placement financing, meaning that new “IP‑token” shares will be created and sold to the Story Foundation and the crypto‑focused investors listed. Because the tokens are convertible into equity (or represent equity‑like participation in the IP‑reserve), the existing CASK shareholder base will be diluted proportionally to the size of the token pool relative to the current share capital. In practice, the $120 M token allocation represents roughly 55 % of the total financing ($120 M / $220 M) and, if priced at the same per‑share level as the cash component, will increase the post‑placement share count by about 55 % versus the pre‑placement outstanding shares. Consequently, each existing shareholder’s ownership percentage and earnings per share (EPS) will be cut by roughly one‑third to one‑half, depending on the exact conversion ratio applied to the token.

From a market‑dynamic perspective, this dilution will likely generate short‑term selling pressure on CASK’s stock as the new supply of equity is absorbed and investors re‑price the company on a lower per‑share earnings base. However, the token reserve is being marketed as a strategic, long‑term growth engine—linking the brand’s IP to a blockchain‑backed ecosystem—so the upside potential of the token’s future valuation could offset the dilution impact over the medium to long term. Traders should therefore anticipate a modest price dip on the announcement and during the placement period, but consider a buy‑on‑dip approach if the token‑reserve narrative gains traction and the market begins to price in the expected upside from the IP‑token’s utility and potential appreciation. Tightening stop‑losses around the current support level (≈ $0.85) and targeting a rebound toward the $1.00‑$1.10 range as the token reserve matures could capture the upside while limiting exposure to the immediate dilution‑driven downside.