Avalanche Treasury warns may not survive after stock drop

Avalanche Treasury Co., a firm created to give public investors exposure to the Avalanche cryptocurrency ecosystem, has warned it may not survive the year after its stock collapsed and its holdings lost more than half their value. The company, which trades under the ticker AVAT on the Nasdaq, disclosed "substantial doubt" about its ability to continue as a going concern in a recent regulatory filing.

The firm went public on June 11 through a merger with a special-purpose acquisition company, Mountain Lake Acquisition Corp., with an initial valuation of approximately $675 million. Its strategy centered on acquiring and staking a large reserve of AVAX tokens. However, the value of its holdings has plummeted alongside the declining price of AVAX, which is trading near five-year lows around $6.55 to $6.68.

Financial results for the quarter ended March 31 reveal the extent of the damage. The company reported a net loss of $26.78 million, driven almost entirely by fair-value losses on its AVAX portfolio. It purchased roughly 13.8 million AVAX tokens for about $265 million, but by the end of the quarter, that position was worth only about $123 million. Staking revenue of approximately...