TLDR
- American Bitcoin, co-founded by Eric Trump, has fallen more than 95% from its peak stock price
- The collapse has wiped out over $600 million in market value across his roughly 6% stake over 10 months
- The company did a 1-for-15 reverse stock split this week to keep its Nasdaq listing
- The stock hit a record low on Wednesday
- American Bitcoin posted a $118.2 million operating loss in Q1, driven by a $117.2 million bitcoin impairment charge
American Bitcoin, the bitcoin mining company co-founded by Eric Trump, has seen its stock fall more than 95% from its peak. That drop has wiped out more than $600 million in market value tied to his roughly 6% stake over the past 10 months.
The stock hit a record low on Wednesday, continuing a steep decline that has rattled investors who backed the venture early on.
To stay listed on Nasdaq, the company carried out a 1-for-15 reverse stock split this week. That kind of move typically signals a company is fighting to keep its listing requirements, and it rarely inspires confidence.
The reverse split did not stop the bleeding. The stock still closed at a record low on Wednesday, even after the split technically boosted the per-share price on paper.
Heavy Losses in Q1
American Bitcoin’s first quarter results told a tough story. The company reported a $118.2 million operating loss, almost entirely driven by a $117.2 million impairment charge on its bitcoin reserves.
Impairment charges like this are taken when the value of an asset drops below what the company paid for it. For a company built around holding bitcoin, that kind of charge cuts deep.
Despite the financial pain, American Bitcoin has not backed away from its accumulation strategy. On Monday, the company added 500 BTC to its holdings.
That brings its total bitcoin stash to more than 8,000 BTC. At current bitcoin prices, that represents a sizeable position, though one that has already caused the company serious accounting pain.
Stock Down From Peak
The numbers here are stark. A stock that falls 95% from its peak means an investor who bought at the top would need a 2,000% gain just to break even.
For Eric Trump, whose stake is around 6%, the paper losses tied to that peak valuation now exceed $600 million across those 10 months.
The company’s strategy of mining and accumulating bitcoin is not unusual in the space. But the scale of the stock decline sets it apart from many peers.
The reverse split ratio of 1-for-15 is on the aggressive end. It reduced the number of outstanding stock units by a factor of 15, which lifted the per-share price but did nothing to address the underlying business performance.
American Bitcoin’s record low on Wednesday came after the reverse split was completed, a sign that investors are focused on fundamentals rather than the adjusted price.
The Q1 operating loss of $118.2 million is the most recent financial data available for the company.
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