ETHZilla Sells $40M ETH for Share Buybacks Amid Discount Concerns
Key Developments:
- ETHZilla sold $40 million worth of ETH to fund share repurchases, aiming to address a significant discount to NAV.
- The company has repurchased approximately 600,000 shares for $12 million since October 24 and plans more buybacks while the discount persists.
- Chairman McAndrew Rudisill highlights this as balance-sheet arbitrage using ETH sales for cash, which he claims will benefit remaining shareholders.
- ETHZilla maintains ~$400 million in ETH holdings with no net debt and attributes stock pressure to concentrated short selling.
- Critics question the decision to sell ETH instead of using $569 million in available cash, raising concerns about treasury management practices.
- Dimitri Semenikhin has invested 2% in ETHZilla, seeing it as undervalued due to outdated financial perception related to legacy biotech results.
- Skeptics warn of potential "death spiral" if other ETH-heavy treasuries emulate this strategy, possibly triggering increased selling pressure on ETH.
- At the time of reporting, ETH traded at $4,156.
