Kerrisdale Capital Takes Short Position Against BitMine Immersion
Kerrisdale Capital has taken a short position in BitMine Immersion (BMNR), critiquing its business model as outdated.
- BitMine, led by Fundstrat's Thomas Lee, shifted from bitcoin mining to an ether-focused treasury, raising over $10 billion and acquiring more than 2.8 million ETH.
- The company's strategy is likened to Strategy (MSTR), which involved issuing shares at a premium to buy crypto, but Kerrisdale argues current market conditions no longer support this approach.
- Despite initially surging from $5 to over $100, BitMine's stock has retreated to around $58. Stock issuance paced at $170 million daily has reportedly fatigued investors.
- Kerrisdale criticizes BitMine’s latest $365 million equity raise, suggesting it is a "discounted giveaway" when warrant terms are considered.
- Thomas Lee's presence is questioned for lacking the influence needed to sustain investor confidence compared to figures like Michael Saylor.
- Kerrisdale remains positive on [ETH](https://holder.io/coins/eth/) but suggests buying directly rather than through intermediaries like BitMine.
- Increased competition includes over 150 U.S.-listed firms planning $100 billion in crypto offerings and upcoming Ethereum ETFs offering lower-cost exposure.
- BitMine's disclosures have grown opaque, with slowed ETH-per-share growth despite rising token holdings, causing their market premium to drop significantly.
- Kerrisdale concludes that BitMine's premium is expected to decline further due to generic strategies and increased competition.
Shares of BitMine are down by 2% as of Wednesday.