Dogecoin Treasury Misstep: CleanCore Stock Drops 78% to All-Time Low

CleanCore Solutions' bold strategy to incorporate Dogecoin as an official treasury asset has led to significant market repercussions. The company’s stock has plummeted nearly 78% over the past month as investors react to considerable quarterly losses alongside a sharp decline in DOGE’s price.

Key Takeaways

CleanCore Solutions has faced a 78% drop in stock value due to its Dogecoin treasury strategy.
The company reported a substantial net loss of $13.4 million for the last quarter while revenue grew.
General and administrative expenses increased dramatically, linked to the Dogecoin rollout.
Dogecoin's price has declined over 21% in the past month, impacting CleanCore’s investments.
Institutional interest in Dogecoin remains high, despite CleanCore's stock struggles.

Dogecoin Treasury Bet Backfires: CleanCore Stock Crashes 78% to Record Low

The stock, traded under the ticker ZONE on the NYSE American, hit a record low of $0.3818 this week, ending Thursday's session down nearly 12%.

CleanCore's Falling Stock

The downtrend persisted into Friday, raising concerns regarding its cryptocurrency-heavy balance sheet.

Dogecoin Strategy Harms CleanCore Amid Rapid Cost Increases

This downturn comes just days after CleanCore revealed its fiscal first-quarter results for the period ending September 30, which showed a widening net loss of $13.4 million, a significant increase from just $0.9 million during the same quarter last year.

Financial Report

While revenue doubled year-over-year to $0.9 million and gross profit increased to $0.5 million, the company's expenses surged dramatically. General and administrative costs soared to $8.6 million from $0.9 million, largely due to professional fees, stock-based compensation, new hires, and insurance expenses associated with its Dogecoin treasury implementation.

Central to CleanCore's strategy is Dogecoin. The firm raised $175 million in a private placement to establish its official Dogecoin Treasury, collaborating with House of Doge and using Bitstamp by Robinhood as its trading platform.

To date, CleanCore holds over 733 million DOGE, valued at approximately $117.5 million as of November 12. The company intends to acquire 5% of Dogecoin’s circulating supply, aiming to enhance the token's real-world usage.

CEO Clayton Adams confirmed the firm’s commitment despite the recent market turbulence. “Our financial results during the quarter reflect several one-time expenses related to our treasury strategy transaction, while our core business experienced growth and cash flow on a stand-alone basis,” he stated.

CleanCore Treasury Overview

However, the timing has been unforgiving, with Dogecoin's price dropping over 21% in the last month and falling below the crucial $0.17 mark, testing long-term support that has been in place since late 2023.

Analysts are concerned, noting that DOGE is exhibiting a major technical breakdown, with bearish momentum and weaknesses in key indicators.

DOGE Price Analysis

Currently, DOGE is trading around $0.163, down nearly 7% in the last 24 hours. A slip below this multi-year support trend line could signal a more significant decline, potentially marking the end of its cycle that started in late 2023.

CleanCore Shares Decline Despite Increasing Corporate Adoption of Dogecoin

Most of CleanCore’s significant DOGE acquisitions occurred at prices above the current market level. Its first major buy on September 5 involved 285.4 million DOGE at about $0.238 each, followed by more purchases that increased its treasury to over 700 million DOGE by mid-October.

Earlier in the quarter, the company had reported over $20 million in unrealized gains, but these have since vanished amid the price drop.

CleanCore’s Dogecoin initiative garnered interest from over 80 institutional investors, including Pantera, GSR, FalconX, and Borderless Capital.

Moreover, CleanCore's treasury strategy aligns with a wider trend of corporate engagement in Dogecoin-related projects. For instance, DogeHash Technologies is expanding its mining operations after securing a $2.5 million loan from Thumzup Media to add over 500 new ASIC miners, boosting its fleet to more than 4,000 machines by the year's end.

Despite this positive momentum in the broader cryptocurrency ecosystem, CleanCore’s stock has not capitalized on it. Although shares are still up by more than 60% this year, ZONE now trades significantly below the reported net asset value of its Dogecoin treasury.