The digital asset treasury firm FG Nexus has executed a sale of nearly 11,000 ETH from its strategic reserves to fund a share buyback program. Kyle Cerminara, the company’s Chairman and CEO, confirmed the operation this Thursday, highlighting that the measure seeks to defend shareholder value amidst a challenging market environment. This decision reflects the pressure faced by companies in the sector whose stock prices have fallen significantly below the net asset value of their underlying assets.
The firm disclosed that it used proceeds generated from liquidating 10,922 Ether, valued at approximately $33 million, along with an additional $10 million in borrowed funds. In total, these resources allowed for the repurchase of 3.4 million common shares, representing about 8% of the outstanding float. The acquisitions were made at an average price of $3.45, a figure considerably lower than the reported net asset value of $3.94 per share, which theoretically benefits remaining holders by increasing their proportional stake in the treasury.
Is liquidating core assets to support stock price sustainable?
This financial maneuver is not an isolated case but follows a recent trend observed in other companies within the crypto treasury niche. Just a few weeks ago, peer firm ETHZilla conducted a similar operation by selling $40 million in tokens. The main objective is to close the gap between market price and real value, taking advantage of the current discount. However, the strategy carries the implicit risk of reducing exposure to the primary asset, Ether, just as its price has suffered a correction, trading around $2,820 following the announcement.
Despite the sale, FG Nexus maintains a robust position with approximately 40,000 Ether remaining on its balance sheet, in addition to $37 million in cash and USDC stablecoins. The company’s management defends the tactic as a mathematical mechanism to increase per-share value in the long term. Cerminara noted that they will continue buybacks as long as the discount persists, arguing that this creates a positive asymptotic effect on valuation metrics, although the market remains attentive to the sustainability of selling the core asset to fund the corporate structure itself.
