10X's BNC Position: Disclosure Process and Effects on Pricing

Allegations of Undisclosed Stake by 10X Capital

YZi Labs claims that 10X Capital's exercise of warrants has resulted in its total ownership of BNC surpassing the 5% threshold that requires SEC disclosure by late 2025. According to YZi, the figures in 10X Capital’s own filings make this calculation clear. Despite a public request for transparency over a week ago, neither 10X Capital nor its board representative, Hans Thomas, has responded or provided any clarification.

Significance of the Potentially Hidden Position

The magnitude of the alleged undisclosed holding is considerable. With BNC’s market capitalization standing at $220.76 million, a 5% stake equates to more than $11 million in equity. If this position entered the company’s structure without proper disclosure, it leaves other investors in the dark about a material development.

Regulatory Changes Heighten the Issue

The seriousness of the situation is amplified by recent SEC amendments, which have reduced the deadline for initial Schedule 13D filings from ten days to just five business days. In this stricter regulatory climate, 10X Capital’s ongoing silence after being publicly called out only intensifies concerns about transparency and compliance.

Market Reaction: Price and Liquidity Shifts

The market’s response has been unmistakable, with BNC’s share price experiencing a sharp decline. The stock has fallen 22.27% since the start of the year and is now trading close to its 52-week low of $4.55. This marks a staggering 1561% drop from its 52-week high of $82.88, reflecting a significant and sustained withdrawal of capital. The possibility of an undisclosed stake exceeding $11 million continues to weigh heavily on the stock’s valuation.

Trading volumes have surged in response to the news. On the day the disclosure dispute became public, trading activity soared to 590,100 shares—well above the average daily volume of 341,830 shares. This spike in liquidity demonstrates investors’ urgency to adjust their positions amid growing uncertainty and regulatory risk.

Currently, BNC faces intense downward pressure and diminishing liquidity. With shares at multi-year lows and the threat of further selling from a large, undisclosed stakeholder, prospects for a swift recovery appear limited. The market is factoring in the risks associated with this lack of openness.

Key Catalysts and Risks Ahead

The most immediate catalyst is regulatory intervention. Given the SEC’s shortened filing deadlines, 10X Capital’s lack of response after a week now constitutes a clear breach. The next development could be action from the SEC or BNC’s board, potentially compelling a Schedule 13D filing. Such a filing would confirm the size of the undisclosed stake, clarify the situation, and likely prompt a formal investigation, which could result in penalties and increased scrutiny of the company’s governance.

Another major risk is the possibility of covert selling. While the current debate centers on ownership disclosure, a more bearish scenario would be if 10X Capital is actively offloading shares. Although the average daily volume is 341,830 shares, a persistent increase above this level could signal ongoing institutional selling, potentially stemming from the undisclosed position and leading to further liquidity outflows beyond the initial spike.

The situation remains highly uncertain, with thin trading volumes and no definitive disclosure. Without a Schedule 13D, investors lack a clear understanding of the stake involved. In the absence of evidence of selling, concerns about hidden supply persist. The resolution depends on two key developments: regulatory action mandating disclosure, and market activity that might reveal whether the position is being reduced.