CleanCore Solutions (ZONE) is facing a stock market collapse. Its shares fell 78% to a record low of $0.38 this week. The CleanCore Solutions Dogecoin strategy has raised investor doubts. These doubts are exacerbated by the token’s price drop and significant quarterly losses. CEO Clayton Adams defended the strategy.
The plunge follows CleanCore’s fiscal first-quarter report. It revealed a widening net loss of $13.4 million, compared to $0.9 million the previous year. Although revenue doubled to $0.9 million, operating expenses soared. General and administrative expenses increased from $0.9 million to $8.6 million. This increase was driven by costs associated with implementing its new Dogecoin treasury.
CleanCore has centered its financial strategy on the cryptocurrency. The company closed a $175 million private placement to build its official treasury. It has accumulated over 733 million DOGE, valued at $117.5 million as of November 12. Its long-term goal is to acquire 5% of DOGE’s circulating supply to expand the token’s real-world utility.
Can CleanCore’s Long-Term Vision Survive Dogecoin’s Volatility?
The investment’s timing has been detrimental. Dogecoin’s price has fallen over 21% in the last month. DOGE is trading near $0.163, testing a key long-term support level held since late 2023. CleanCore’s purchases were made at higher average prices. This includes a large acquisition of 285.4 million DOGE at $0.238 per token. The companies betting on volatile crypto assets face this high risk.
Despite the stock’s collapse, CEO Clayton Adams insists the expenses are “one-time.” He stated the core business experienced growth and positive cash flow on a standalone basis. However, the treasury’s unrealized gains have evaporated. ZONE shares now trade far below the net asset value of their Dogecoin holdings, as the market punishes the risky strategy.
