ETHZilla (ETHZ), a company listed on Nasdaq, announced on Friday that it liquidated $74.5 million worth of ether from its treasury. This move is part of a strategy to alleviate its debt burden, following a previous sale of $40 million in ether last October aimed at funding share repurchases.
The latest sale involved the disposal of 24,291 ETH at an average price of $3,068. As a result, ETHZilla”s holdings now stand at approximately 69,800 ETH, which is valued at more than $200 million. Following the announcement, ETHZ shares witnessed a decline of 4% on Monday and have plummeted around 96% since their peak in August.
This development highlights the mounting pressures faced by companies with digital asset treasuries. Many firms that aggressively acquired cryptocurrencies earlier in the year now find themselves trading below the net asset value (NAV) of their holdings. The disparity between falling stock prices and the relative stability of cryptocurrency values has made it increasingly challenging for these firms to raise capital for further acquisitions. Consequently, some are opting to liquidate portions of their crypto reserves to manage liabilities.
Earlier in the fourth quarter, ETHZilla had already offloaded $40 million in ether, which was utilized to finance share buybacks. Despite this maneuver, the company”s stock price has continued to decline, currently trading below $7, significantly down from the $20 mark when the buyback plan was initially announced.
Looking ahead, ETHZilla indicated that it may continue to generate capital through further sales of ether or equity offerings as it seeks to advance its business objectives.
