AVAX One kickstarts share buyback program with $40 million

AVAX One, a crypto treasury firm for the Avalanche (AVAX) cryptocurrency ecosystem, announced that it had set aside $40 million to purchase shares of its common stock, aiming to increase shareholder value. Ethereum treasury funds, FG Nexus, and ETHZilla have recently followed a similar path by offloading part of their crypto holdings.

The ongoing crypto winter has become a significant hurdle for traders, investors, asset managers, and crypto treasury firms. Avalanche-centered digital asset treasury company AVAX One Technology has turned to share buybacks to mitigate plunging crypto stock prices.

The firm announced a $40 million share buyback of its common stock, which was approved by its board of directors. The announcement detailed that the board will continuously review the share buyback program to determine whether to increase the amount or extend the program, depending on market conditions.

AVAX One commits to adopting strategies that boost shareholders’ value

Jolie Kahn, Chief Executive Officer of AVAX One, commented on the board’s decision, stating that the share repurchase program reflects the company’s commitment to providing value to shareholders.

He explained that the company is repurchasing its “stock as a compelling use of capital that delivers meaningful returns and underscores the strength of the business.” He also explained that the share buyback program is part of the company’s efforts to direct resources to opportunities with the best potential for creating value.

The executive also hinted at the possibility of additional share repurchases in the future, when conditions deem it necessary. The current repurchase program has a one-year term and will be implemented from time to time through various means permitted by securities regulations, including open market purchases.

The company announced that the timing of repurchases under the program will depend on prevailing market conditions, capital allocation alternatives, regulatory requirements, and other significant corporate strategies. According to the company’s announcement, the firm is not mandated to execute the share buyback program and may decide to suspend or discontinue it at any time.

The digital asset treasury company’s move to repurchase its shares comes amid a rising trend among crypto treasury companies that are repurchasing their stock to boost share price. Crypto treasury companies, such as ETHZilla and FG Nexus, even sold part of their crypto holdings to support similar financial moves.

Ether treasury firm ETHZilla announced it had sold ETH worth $40 million from its treasury and announced plans to use the proceeds to fund share buyback programs. The company purchased 600,000 shares of its common stock for approximately $12 million. The treasury company’s board approved a $250 million share buyback program, according to a press release published on October 27.

Another ETH treasury firm, FG Nexus, announced on November 20 that it had sold approximately 11,000 ETH for $33 million and also used the proceeds to repurchase its shares. The company also added $10 million in borrowed funds and used the total funds to purchase more than 3 million shares of its common stock.

Crypto treasury stocks bleed amid prevailing bearish market sentiment

AVAX One, ETHZilla and FG Nexus’ YTD performance. Source: Google Finance

Data from Google Finance indicates that the three crypto treasury companies have suffered significantly under prevailing market conditions.

AVAX One’s shares have declined by more than 70% since the company announced its rebranding from AgriFORCE One and transitioned its operations to a crypto treasury firm. The firm’s stock price is down 92.26% Year-to-date and has declined by 55.28% in the last month.

ETHZilla is down 43.02% year-to-date and has declined by 36.61% in the last month. On the other hand, FG Nexus’ share price has also plummeted by double figures since the start of the year. The stock’s year-to-date performance sits at a decline of 88.94%.

Data from CoinMarketCap shows that Bitcoin is down 14.08% in the last seven days and has dipped by more than 10% in the last 24 hours. Ethereum’s price has also declined steeply by 14% over the last seven days and 10% over the last 24 hours.