Ethereum News Today: DATs Gamble Buybacks Can Outpace Liquidity Crisis as Debt Soars

FG Nexus Inc. (FGNX) has sold $32.7 million in Ethereum to fund a share buyback program after its stock plummeted 94% in four months, signaling deepening challenges for digital asset treasury (DAT) firms grappling with net asset value (NAV) discounts. The company disclosed the sale of 10,922 ETH in October, using proceeds and $10 million in debt to repurchase 3.4 million shares at $3.45 apiece-8% of its outstanding shares-while its NAV per share stood at $3.94. FG Nexus now holds 40,005 ETH, $37 million in cash, and $11.9 million in debt, according to its Q3 update.

The move mirrors broader industry pressures as DATs managing $42.7 billion in crypto assets face mounting forced liquidations of $4 billion to $6 billion to prop up equity prices. ETHZilla, another Ethereum-focused treasury firm, previously sold $40 million in ETH in October to finance its own buybacks. Anthony Scaramucci-backed AVAX One (AVX) also announced a $40 million share repurchase plan this week, joining a growing trend of DATs using buybacks to narrow the gap between stock prices and underlying asset values.

FG Nexus's strategy hinges on leveraging debt and asset sales to boost per-share valuations. CEO Kyle Cerminara stated the company plans to continue repurchasing shares while its stock trades below NAV, creating an "increasingly asymptotic effect" as share counts shrink and NAV per share rises. However, the firm's debt has grown to $11.9 million, and it has liquidated 21% of its ETH reserves compared to September levels. Analysts warn that thin liquidity, leverage, and stalled corporate buying could exacerbate systemic risks as companies unwind positions to stabilize equity prices.

The stock sell-off reflects broader market skepticism. FG Nexus's shares have fallen 94% since peaking at $38.30 in August and now trade at $2.41, a discount of over 35% to its NAV. Similar pressures have hit peers: ETHZilla's stock trades at a 30% NAV discount, while Metaplanet, a Bitcoin-focused treasury firm, saw its market-to-NAV ratio dip to 0.99 earlier this month.

Market reactions to these sales have been mixed. Ethereum prices dipped 2% immediately after FG Nexus's announcement, though both ETH and Bitcoin rebounded slightly. Michael Saylor, MicroStrategy's chairman, dismissed concerns about DAT volatility, calling it "Satoshi's gift" and emphasizing long-term Bitcoin investment horizons.

FG Nexus's Q3 results showed a revenue surge to $892,000 from $110,000 year-over-year, but its operating margin remains negative at -74.4%, highlighting operational challenges. The company's restructuring-aligned with a $200 million buyback program and a partnership with Securitize to tokenize shares-aims to pivot toward asset tokenization and digital finance ecosystems.

Industry observers caution that the DAT model's sustainability depends on resolving liquidity and demand issues. K33 analysts noted that prolonged dilution and a saturated DAT landscape have eroded investor appetite, forcing firms to rely on aggressive buybacks and asset sales to maintain relevance.