Ethereum-focused treasury firm ETHZilla mentioned it has bought roughly $40 million price of ether to fund ongoing share repurchases, a maneuver geared toward closing what it calls a “important {discount} to NAV.” In a press assertion on Monday, the corporate disclosed that since Friday, October 24, it has purchased again about 600,000 frequent shares for about $12 million underneath a broader authorization of as much as $250 million, and that it intends to proceed shopping for whereas the {discount} persists.
ETHZilla Dumps ETH For BuyBacks
The corporate framed the buybacks as balance-sheet arbitrage moderately than a strategic retreat from its core Ethereum publicity. “We’re leveraging the power of our steadiness sheet, together with lowering our ETH holdings, to execute share repurchases,” chairman and CEO McAndrew Rudisill mentioned, including that ETH gross sales are getting used as “money” whereas frequent shares commerce beneath web asset worth. He argued the transactions can be instantly accretive to remaining shareholders.
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ETHZilla amplified the message on X, saying it might “use its sturdy steadiness sheet to help shareholders by means of buybacks, scale back shares out there for brief borrow, [and] drive up NAV per share” and reiterating that it nonetheless holds “~$400 million of ETH” on the steadiness sheet and carries “no web debt.” The corporate additionally cited “current, concentrated quick promoting” as an element protecting the inventory underneath strain.
The market-structure logic is easy: when a digital-asset treasury trades beneath the worth of its coin holdings and money, shopping for again inventory with “coin-cash” can, in concept, collapse the {discount} and raise NAV per share. However the optics are contentious inside crypto as a result of the mechanism requires promoting the underlying asset—right here, ETH—to buy fairness, probably weakening the very treasury backing that traders initially sought.
Dying Spiral Incoming?
Fashionable crypto dealer SalsaTekila (@SalsaTekila) commented on X: “That is extraordinarily bearish, particularly if it invitations related conduct. ETH treasuries aren’t Saylor; they haven’t proven diamond-hand will. If treasury corporations begin dumping the coin to purchase shares, it’s a dying spiral setup.”
Skeptics additionally zeroed in on funding selections. “I’m principally curious why the corporate selected to promote ETH and never use the $569m in money that they had on the steadiness sheet final month,” one other analyst Dan Smith wrote, noting ETHZilla had simply mentioned it nonetheless holds about $400 million of ETH and thus didn’t deploy it on contemporary ETH accumulation. “Why not simply use money?” The query cuts to the core of treasury signaling: utilizing ETH as a liquidity reservoir to defend a reduced fairness might be learn as rational capital allocation, or as capitulation that undermines the ETH-as-reserve narrative.
Past the buyback, a retail-driven storyline has quickly shaped across the inventory. Enterprise Insider reported that Dimitri Semenikhin—who not too long ago grew to become the face of the Past Meat surge—has focused ETHZilla, saying he bought roughly 2% of the corporate at what he views as a 50% {discount} to modified NAV. He has argued that the market is misreading ETHZilla’s steadiness sheet as a result of it nonetheless displays legacy biotech outcomes moderately than the present digital-asset treasury mannequin.
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The identical report cites liquid holdings on the order of 102,300 ETH and roughly $560 million in money, translating to about $62 per share in liquid property, and calls out a 1-for-10 reverse cut up on October 15 that, in his view, muddied the optics for retail. Semenikhin flagged November 13 as a possible catalyst if outcomes present the pivot to ETH producing income.
The corporate’s personal messaging emphasizes the discount-to-NAV lens moderately than a change in technique. ETHZilla instructed traders it might preserve shopping for whereas the inventory trades beneath asset worth and highlighted a purpose of shrinking lendable provide to blunt short-selling strain.
For Ethereum markets, the fast circulate impact is proscribed—$40 million is marginal in ETH’s every day liquidity—however the second-order threat flagged by merchants is behavioral contagion. If different ETH-heavy treasuries observe the playbook, promoting the underlying to purchase their very own inventory, the circulate might develop into pro-cyclical: cash are bought to shut fairness reductions, the promoting pressures spot, and wider reductions reappear as fairness screens rerate to the weaker mark—repeat.
That’s the “dying spiral” situation skeptics warn about when the treasury asset doubles as the corporate’s sign of conviction.
At press time, ETH traded at $4,156.
Featured picture created with DALL.E, chart from TradingView.com
