ETHZilla Offloads $40M Ether to Buyback ETHZ Shares

Ethereum digital asset treasury (DAT) company ETHZilla has sold approximately $40M of ETH treasury holdings to finance an aggressive share repurchase program, the Peter Thiel-backed company announced late Monday.

What’s the Scoop?

• Strategic Sales: ETHZilla said it will continue liquidating ETH holdings to fund additional buybacks “until the discount to NAV is normalized.” Despite the recent sale, ETHZilla still holds around $400M ETH on its balance sheet.
• Accretive to Shareholders: “We’re leveraging the strength of our balance sheet to execute share repurchases at a significant discount to NAV,” said McAndrew Rudisill, ETHZilla’s chairman and CEO in a press release about the buyback. “These repurchases should be immediately accretive to shareholders while reducing the float available for stock loan and borrow activity.”
• Activist Pressure: Just 45 minutes before ETHZilla announced share buyback plans, pseudonymous investor Dimitri “Capybara Stocks” Semenikhin publicly pleaded with ETHZilla management to repurchase stock and close ETHZ's persistent 30-40% discount to NAV. Semenikhin has been attributed credit for a recent price surge in Beyond Meat (BYND).

Bankless Take:

While numerous DATs have promised to sell their treasury holdings and repurchase shares to prevent persistent NAV discounts, ETHZilla is quite possibly the first to actually execute a buyback program. ETHZ shares rallied ~15% on the announcement, meanwhile, ETH prices are flat on the day.