Short Seller Kerrisdale Targets Tom Lee’s BitMine, Calls Model ‘Extinct’
Shares of BitMine Immersion Technologies (BMNR) swung sharply on Wednesday after short-selling agency Kerrisdale Capital introduced a bearish place in opposition to the crypto treasury firm, calling its enterprise mannequin “a relic on the verge of extinction.”
Key Takeaways:
- Kerrisdale Capital shorted BitMine, calling its share-for-Ether technique “a relic on the verge of extinction.”
- BitMine, now the world’s largest public Ethereum holder, holds about 9 ETH per 1,000 shares.
- Despite the criticism and claims of inventory dilution, BitMine’s shares closed up 1.35%.
Kerrisdale’s report criticized BitMine’s strategy of promoting inventory to buy Ether (ETH) and develop its tokens-per-share metric, arguing that the strategy now not justifies the corporate’s premium valuation.
The agency mentioned BitMine’s market worth is now converging with the underlying worth of its crypto holdings, diminishing its attraction to traders.
BitMine Becomes World’s Largest Public Ethereum Holder
BitMine, as soon as a conventional Bitcoin miner, pivoted earlier this 12 months to turn into the world’s largest public holder of Ethereum, amassing billions worth of ETH.
Kerrisdale estimated that BitMine’s steadiness sheet holds about 9 ETH per 1,000 shares, however warned that “the playbook of issuing shares to purchase tokens has reached its restrict.”
Despite the scathing critique, BitMine’s inventory managed to shut 1.35% increased at $60, recovering from an early 5% dip to $57.41. Shares rose one other 0.4% after hours.
Kerrisdale, identified for concentrating on overvalued crypto-related corporations, has beforehand shorted Riot Platforms and Strategy (Michael Saylor’s Bitcoin-buying agency).
Riot dismissed Kerrisdale’s findings as “unsound,” whereas Strategy ignored the report, with Saylor persevering with to champion the agency’s aggressive Bitcoin technique.
In its newest observe, Kerrisdale accused BitMine of extreme inventory dilution, pointing to $10 billion in new share choices over the previous three months.
“Every rally is met with extra provide,” it mentioned, describing the corporate’s $365 million September elevate as “a reduced giveaway disguised as a premium deal.”
The report additionally took goal at govt chairman Tom Lee, saying that whereas his fame brings visibility, “he lacks the cult-like magnetism of Michael Saylor.”
It added that BitMine’s mannequin “wants shortage, charisma, and innovation — none of which it at present presents.”
Kerrisdale concluded that its brief place is “not a guess in opposition to Ethereum, however in opposition to the notion that traders ought to pay a premium for publicity they may simply replicate.”
“If you need ETH,” the agency wrote, “simply purchase it straight, stake it, or make investments by means of one of many new ETFs. BitMine’s intermediary pitch has run its course.”
Institutions and ETFs Now Hold 12.5M ETH
Institutional demand for Ethereum is hitting new highs, with treasury corporations and exchange-traded funds now holding over 12.48 million ETH, roughly 10.31% of the network’s total supply.
According to knowledge from StrategicETHReserve, company treasuries maintain about 5.66 million ETH (4.68% of provide), whereas spot Ethereum ETFs have amassed one other 6.81 million ETH (5.63%).
The figures underscore a rising shift amongst establishments towards Ethereum as a productive asset, mirroring the company Bitcoin accumulation pattern seen lately.
October noticed US-listed spot Ether ETFs report internet inflows of $621.4 million, greater than doubling September’s $285.7 million, per SoSoValue.
In August, inflows peaked at $3.9 billion, suggesting a sustained urge for food for Ethereum publicity.
One standout instance is SharpLink Gaming, which revealed this week it now holds 839,000 ETH with no debt on its steadiness sheet.
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