Avalanche Treasury Corp (AVAT), a public company built around an AVAX reserve strategy, has seen its stock fall from around $10 in early June to roughly $0.5, a drop of nearly 95% in about a month. In its 10-Q filing with the U.S. Securities and Exchange Commission, the company said that substantial doubt about its ability to continue as a going concern has not been alleviated.
Post-listing selloff hit the stock almost immediately
AVAT completed its Nasdaq listing on June 11 through a merger with special purpose acquisition company Mountain Lake Acquisition Corp. The plan behind the transaction dates back to October last year, when the company presented an ambitious target: building an AVAX token treasury valued at $1 billion. The listing has barely settled, but the stock has already gone through a steep repricing.
Its AVAX bet has lost more than half its value on paper
The company spent about $265 million acquiring AVAX. By the end of March, that position was worth only about $123 million, leaving AVAT with an unrealized loss of more than 50%. The report also said that 7.8 million AVAX had been locked up as collateral, tightening the company’s room to maneuver.
Pressure is spreading across the digital asset treasury model
AVAT is not the only company under strain. AgriFORCE Growing Systems, which renamed itself AVAX One in September last year, had outlined plans to raise $550 million and acquire more than $700 million worth of AVAX. Its market capitalization has since dropped to about $43 million, with the stock down 68% since the start of the year.
The valuation pressure is also showing up in larger listed crypto treasury firms. The report noted that Strategy’s corporate mNAV recently fell below 1. That level suggests the market is valuing the listed vehicle at less than the value of the bitcoin it holds on its books, weakening the premium that had supported the treasury-company trade.