Shares of XCF Global (SAFX) dropped another 8.1% to $0.35 on July 28, extending a punishing slide that has now erased roughly 19% of value in just five trading sessions. The catalyst: a preliminary proxy filing on July 27 detailing a proposed business combination with DevvStream, a carbon credit technology company tied to blockchain-based environmental assets, compounded by broad weakness across crypto-linked names. XCF Global's Three-Way Merger Bet Sends Shares Into a Tailspin — Is Massive Dilution the Price of Reinvention?
Shares of XCF Global (SAFX) sank to $0.35 on July 28, down 8.1% and extending a five-day losing streak that has wiped out nearly a fifth of the stock's value. The selloff intensified after the company's July 27 preliminary proxy filing laid bare the full scope of a complex three-party merger with carbon credit firm DevvStream and clean-fuels developer Southern Energy Renewables — and the eye-watering dilution it would impose on current shareholders.
• The Share Count Could More Than Triple, Crushing Current Holders' Stake. XCF is asking stockholders to approve an increase in authorized Class A shares from 500 million to 1.7 billion — a 240% expansion — while also boosting its employee stock incentive pool from roughly 14.6 million to 80 million shares.
After the deal closes, existing XCF shareholders are expected to own just 66.7% of the combined company, with Southern Energy getting 23.3% and DevvStream 10.0%. For a stock already trading at $0.35, the sheer volume of new shares threatens to compress the per-share value further.
• The Deal's Grand Vision Remains Unproven and Heavily Conditional. The merger aims to create a "next-generation energy transition platform" integrating sustainable aviation fuel, green methanol, carbon credit sales, and advanced energy infrastructure. That ambition is sweeping, but the transaction still requires shareholder approvals, regulatory clearances, SEC sign-off on the registration statement, stock-exchange approvals, and multiple financing and commercial milestones. Southern Energy alone is planning up to $400 million in bond financing — an enormous capital raise for a combined entity built around sub-dollar equity.
• Short-Term Cash Pressures Add Urgency and Risk. On July 1, XCF secured a discounted $1 million, two-month loan, pledging core assets and reserving default shares — increasing dilution risk if repayment obligations are not met. This signals a company racing to close the merger before its own balance sheet deteriorates further.
• Crypto and Tech Weakness Amplifies the Pain. Broader selling pressure on blockchain-linked and technology names has compounded the proxy-driven selloff. With the implied value of merger consideration to DevvStream shareholders collapsing from $2.74 to $0.53 per share between deal signing and last week, the market is loudly questioning whether this combination creates value — or simply reshuffles risk among three fragile partners.