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Investing.com -- Bitmine Immersion Technologie (NASDAQ:BMNR) stock declined 2% Wednesday after Kerrisdale Capital published a short report targeting the $18 billion Ethereum-focused digital asset treasury (DAT).
The short-seller’s report criticizes Bitmine’s business model, claiming the company is "chasing a model that is on its way to extinction." Kerrisdale argues that Bitmine’s strategy of selling stock at a premium to the value of tokens on its balance sheet and recycling proceeds into more crypto is no longer viable in the current market environment.
According to the report, Bitmine has issued more than $10 billion of new stock in just three months—approximately $170 million per day—which has led to investor fatigue. Kerrisdale claims that while the company reports growth in total ETH tokens, the pace of ETH-per-share accretion has slowed as the net asset value premium narrows and share count increases.
The short-seller particularly criticized a recent $365 million direct offering that Bitmine had described as "materially accretive," arguing it was actually "a discounted giveaway" when accounting for attached warrants.
Kerrisdale’s thesis isn’t a bet against Ethereum itself but against paying a market premium for it through Bitmine. The report suggests investors would be better off buying ETH directly, staking it, or holding it through ETFs rather than through Bitmine’s vehicle.
The short report comes amid what Kerrisdale describes as a changing competitive landscape for digital asset treasuries, with The Block reportedly tallying more than $100 billion in planned capital raises by US-listed firms pursuing similar crypto-treasury strategies this year.