FG Nexus Liquidates Ether to Boost Share Repurchase Initiative
In a move aimed at bolstering its share repurchase initiative, FG Nexus has liquidated 10,922 ether (ETH). This strategic decision was communicated to shareholders in an update and reflects a trend among digital asset treasury (DAT) firms, with similar actions taken recently by companies like ETHzilla, Lite Strategy, and Sequans, who have also reduced their cryptocurrency holdings on their balance sheets.
Details of the Sale and Buyback Plan
FG Nexus, based in Charlotte, executed the sale on October 23. The company utilized the proceeds from this transaction, along with a $10 million loan, to ramp up its buyback efforts, which are part of a larger $200 million plan to repurchase common shares. The firm clarified that this approach is integrated into a broader capital strategy designed to enhance its net asset value and decrease the number of outstanding shares that are undervalued compared to the company’s overall valuation metrics.
Current Holdings and Financial Adjustments
According to the latest figures shared by FG Nexus on November 19, the company still holds a substantial amount of cryptocurrency, with 40,005 ETH and nearly $37 million in cash and USDC. However, this follows a significant reduction from a total of 50,778 ETH at the close of the third quarter, reflecting a purposeful adjustment in its balance sheet composition. Concurrently, the company’s debt has increased to $11.9 million in light of recent financing moves.
Impact of the Share Repurchase Program
The share repurchase program has reportedly contracted FG Nexus’s share float by 3.4 million at an average purchasing price of $3.45 per share. Company management emphasized that acquiring shares below their net asset value could bolster the valuation per share as the available supply decreases. As per its latest figures, FG Nexus reported a net asset value of around $3.94 per share.
Future Plans and Market Position
Beyond these financial maneuvers, FG Nexus reiterated its commitment to refining its operations by shedding legacy business units and redirecting resources toward digital asset-oriented financial products. The firm has started divesting certain legacy segments and is looking to sell off the remainder of its reinsurance business alongside its real estate assets in Quebec.
CEO Kyle Cerminara has indicated that the company plans to pursue share buybacks as long as stock prices remain below the net asset value threshold, highlighting this strategy’s potential to enhance key financial metrics. Despite the recent reduction in its ETH holdings, FG Nexus remains a significant player in the market, being the eighth-largest corporate holder of ethereum among publicly traded companies, outperforming Gamesquare and positioned just behind BTCS Inc.
This latest action reflects both FG Nexus’s strategic financial planning and an industry-wide recalibration as players in the digital assets sector adjust their portfolios amidst evolving market conditions.
