The digital asset treasury firm AVAX One, advised by veteran investor Anthony Scaramucci, suffered a sharp setback in the capital markets this Tuesday. Its shares plummeted more than 32% following an SEC filing to register nearly 74 million shares held by insiders as available for resale to the public.
This regulatory move allows early investors to sell off their holdings, which were previously under restriction and could not be traded openly. Consequently, although the company has not confirmed an immediate sale, the mere possibility of a massive block of shares flooding the market has triggered a wave of panic among retail investors.
The sharp market reaction highlights the fragility of crypto-native public companies when faced with perceptions of dilution. In this way, the company’s value has been severely penalized, even though its business model is built on the strategic accumulation of Avalanche network tokens, aiming to provide direct exposure to the blockchain ecosystem.
Defensive strategies and the imbalance against net asset value
To counter the downward pressure, AVAX One’s board of directors had recently authorized an ambitious share buyback plan worth up to $40 million. However, this measure designed to support the trading price has proved insufficient in the face of fears regarding a coordinated sell-off by holders of preferred shares and convertible notes.
Likewise, the firm faces the common challenge of trading at a significant discount relative to the net asset value (NAV) of its digital holdings. For this reason, management has attempted to pivot toward a validation infrastructure and fintech services strategy to diversify its revenue streams, trying to convince shareholders of the project’s long-term sustainability and growth.
Will the share repurchase plan be enough to stabilize the price before the registered sales are executed?
On the other hand, the involvement of high-profile figures like Scaramucci, founder of SkyBridge Capital, adds a layer of visibility that often amplifies both rallies and corrections. However, in the current context of the capital markets, transparency regarding “insider” movements is the factor that truly determines confidence and liquidity for traded assets.
Finally, the consolidation of this financial technology as a public investment vehicle depends on overcoming these episodes of high operational volatility. AVAX One’s immediate future is tied to its ability to manage the exit of early investors without compromising the firm’s capital structure, while attempting to close the valuation gap that exists between its shares and its crypto holdings.
