BitMine Immersion is a Bitcoin mining company and the largest publicly traded holder of Ethereum. The company announced the approval of a $1 billion open-ended stock repurchase plan to buy back its outstanding shares through the open market or negotiated transactions.
Due to the stock trading price being below the company's net asset value (NAV), BitMine chose to repurchase shares rather than allocate more capital to expand its Ethereum (ETH) reserves, at least for now.
According to a press release on Monday, the company's estimated NAV per share is $22.76, holding 625,000 ETH and 192 Bitcoin (BTC). BitMine has not continued to accumulate ETH at high prices but instead used the NAV gap as a trigger for the buyback, aiming to enhance per-share value and investor exposure to its Ethereum reserves.
"On our path to achieving ETH's '5% alchemy,' sometimes the best expected return on our capital may be to acquire our stock," said Tom Lee, who has served as BitMine's chairman since July 8.
BitMine holds $401.4 million in unsecured cash, which can directly fund a significant portion of the buyback.
After announcing a goal to acquire and stake up to 5% of the total Ethereum supply by June 30, 2025, BitMine appointed Tom Lee as chairman, who subsequently outlined the company's long-term ETH strategy through monthly "Chairman's Address" titled "5% Alchemy."
In a recent update, Lee referred to Ethereum as "the most important macro trade of the next decade" and described stablecoins as "the ChatGPT moment for cryptocurrencies." With about half of stablecoins issued on Ethereum, Lee believes that mainstream adoption of stablecoins will drive continuous increases in ETH prices.
The company is essentially betting that Ethereum will become the foundation of future finance, and holding a significant share of its native token will bring long-term value.
In addition to its ETH holdings, BitMine continues to generate operating income through Bitcoin mining, utilizing immersion cooling technology to enhance efficiency.
While BitMine currently holds the title of the largest publicly traded holder of Ethereum, it is not without competition. Digital entertainment company Sharplink Gaming Inc. announced today that it has additionally acquired 77,209.58 ETH, bringing its total holdings to 438,190 ETH, valued at approximately $1.6 billion.
On Monday, Sharplink Chairman Joe Lubin told Bloomberg that the company will "be able to accumulate more Ethereum per fully diluted share faster than any other Ethereum-based project." However, he added that the company's approach to acquiring more ETH is cautious. "Whatever we do, we will be very careful in controlling leverage," Lubin said.
As this news was released, a report from Standard Chartered indicated that since June, publicly listed companies have purchased 1% of all circulating ETH. The report's author, Geoffrey Kendrick, stated, "ETH treasury companies are just getting started; they are likely to grow tenfold from here."
Related: SharpLink Chairman Joe Lubin: Aiming to buy Ethereum (ETH) faster than any other company
Original article: “BitMine's $1 Billion Buyback Plan Currently Favors Shares Over More Ethereum (ETH)”
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