Staked 7.8 million AVAX for a loan, book loss of over 20 million, but management says risk has been mitigated—this financial magic trick makes my head spin. Is it really stable or just talking tough while waiting for a rebound?

According to Protos, Nasdaq-listed Avalanche Treasury Corporation (AVAT) saw its stock price drop about 93% within a month after completing its SPAC merger, with a market cap now below $30 million. Its SEC filings show the company reported a net loss of approximately $26.8 million in the first quarter, primarily driven by changes in the fair value of AVAX; as of the 10-Q filing, the company had pledged about 7.8 million AVAX to lenders. Protos notes that the company's filings had previously indicated going concern risks, but the same 10-Q later states that after the completion of the business combination and the receipt of loan proceeds, management believes these concerns have been alleviated for the next 12-month outlook period.