The next phase of ongoing difficulties for the Digital Asset Treasury Company (DAT) is entirely in the markets as companies-many of them after the decline of the stock by 50%-98% are trading at levels below the value of the crypto on their balance sheet-sell said crypto to finance the purchases of purchases.
FG Nexus (FGNX), a dat firm focused on Ethereum, said Thursday it sold a chunk of its ether Stash to repurchase stock.
The firm announced that it used the proceeds from the sale of 10,922 ETH, approximately $33 million at current prices – including $10 million in borrowed funds – to buy 3.4 million of its shares. That amounts to about 8% of the remaining float purchased at an average price of $3.45, below the reported NAV of $3.94 per share.
The news hit crypto prices, with ETH quickly sliding about 2% before a modest bounce. Bitcoin slipped about 1% as well, but recovered some of that dip as well.
FG Nexus now holds nearly 40,000 ETH, along with $37 million in cash and USDC StableCoin, according to the Firm Update.
The move underscores the growing pressure on DATs, many of whose stock prices have fallen below the net asset value of their underlying crypto holdings. Fellow ETH Treasury firm Ethzilla sold More than $ 40 million of tokens last month to buy back shares.
Buyout programs offer a way to close that gap, but they also raise questions about how long such companies can maintain operations while liquidating core assets.
“We plan to continue buying back shares while our stocks are below NAV, which creates an increasingly asymptotic effect on our per-share valuation metrics as the number of shares outstanding declines and the net asset value per share increases,” chairman and CEO Kyle Cerminara said in a statement.
FGNX shares gained 2% in the first minutes of Thursday’s session, but remain down more than 95% from last summer’s peak.
