Avalanche Treasury stock plunges 73% since Nasdaq debut

Avalanche Treasury Co.'s stock has fallen 73% on the Nasdaq since its June 11 debut, sliding to $0.50 from an opening price of $1.85.

In a Securities and Exchange Commission filing made public Monday, the company reported a net loss of $26.78 million for the first quarter and a net working capital deficit of $9.06 million at March 31. The filing attributed the losses mainly to unrealized losses on its cryptocurrency holdings.

At quarter end Avalanche Treasury held 13.39 million AVAX tokens acquired at a cost basis of $265.3 million. The fair value of those holdings had declined to $122.8 million by March 31.

AVAX is trading near $6.70 and is down roughly 50.8% year-to-date, increasing valuation swings for firms with concentrated token positions.

Avalanche Treasury completed a roughly $675 million SPAC merger with Mountain Lake Acquisition Corp. and began trading last month. The filing noted that, under the first-quarter financial conditions and the then-uncertainty around the SPAC closing, management had raised “substantial doubt about the company's ability to continue as a going concern within one year.”

The filing added that the merger has since provided access to additional capital and resources. “Based on the improved liquidity profile and the removal of the previously identified uncertainties, management has concluded that substantial doubt about the Company's ability to continue as a going concern is alleviated for the twelve-month look-forward period from the date of the filing of this Form 10-Q,” the filing wrote.

Management said the added liquidity should support operations and meet expected liquidity needs for at least the next 12 months. The company did not provide an updated forecast for future token holdings or planned sales of AVAX, and it noted that unrealized valuation changes remain a primary driver of near-term volatility in results.

In materials released last month, the company reported that the Avalanche network had attracted more than $1.02 billion in institutional funds, facilitated tokenization of over $1.65 billion in real-world assets and supported more than 550 projects. Those figures were presented as context for the firm's strategy of holding and managing AVAX tokens as part of its digital asset treasury business.