Ethereum-focused treasury firm ETHZilla stated it has bought roughly $40 million value of ether to fund ongoing share repurchases, a maneuver aimed toward closing what it calls a “vital {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 roughly $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 slightly than a strategic retreat from its core Ethereum publicity. “We’re leveraging the power of our stability sheet, together with decreasing our ETH holdings, to execute share repurchases,” chairman and CEO McAndrew Rudisill stated, including that ETH gross sales are getting used as “money” whereas frequent shares commerce under web asset worth. He argued the transactions could be instantly accretive to remaining shareholders.
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ETHZilla amplified the message on X, saying it will “use its sturdy stability sheet to assist 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 stability sheet and carries “no web debt.” The corporate additionally cited “latest, concentrated brief promoting” as an element retaining the inventory underneath stress.
The market-structure logic is simple: when a digital-asset treasury trades under the worth of its coin holdings and money, shopping for again inventory with “coin-cash” can, in idea, collapse the {discount} and elevate 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.
Demise Spiral Incoming?
Fashionable crypto dealer SalsaTekila (@SalsaTekila) commented on X: “That is extraordinarily bearish, particularly if it invitations comparable conduct. ETH treasuries are usually not Saylor; they haven’t proven diamond-hand will. If treasury firms begin dumping the coin to purchase shares, it’s a loss of life spiral setup.”
Skeptics additionally zeroed in on funding decisions. “I’m largely curious why the corporate selected to promote ETH and never use the $569m in money that they had on the stability sheet final month,” one other analyst Dan Smith wrote, noting ETHZilla had simply stated it nonetheless holds about $400 million of ETH and thus didn’t deploy it on recent 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 fashioned across the inventory. Enterprise Insider reported that Dimitri Semenikhin—who lately 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 stability sheet as a result of it nonetheless displays legacy biotech outcomes slightly 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 belongings, and calls out a 1-for-10 reverse break 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 earnings.
The corporate’s personal messaging emphasizes the discount-to-NAV lens slightly than a change in technique. ETHZilla advised traders it will maintain shopping for whereas the inventory trades under asset worth and highlighted a objective of shrinking lendable provide to blunt short-selling stress.
For Ethereum markets, the instant movement impact is restricted—$40 million is marginal in ETH’s day by day liquidity—however the second-order danger flagged by merchants is behavioral contagion. If different ETH-heavy treasuries comply with the playbook, promoting the underlying to purchase their very own inventory, the movement may change 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 “loss of life spiral” state of affairs 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
