TLDR
- BitMine stock fell after Kerrisdale Capital published a short report criticizing the company’s business model of selling shares to buy Ethereum
- Kerrisdale claims BitMine issued over $10 billion in new stock over three months, approximately $170 million per day
- The short seller criticized a recent $365 million stock offering as a “discounted giveaway” despite management calling it accretive
- BitMine holds 2.83 million ETH worth over $12.5 billion, making it the largest public holder of the token
- Kerrisdale suggests investors should buy Ethereum directly rather than paying a premium through BitMine’s stock
BitMine Immersion Technologies saw its stock decline after short seller Kerrisdale Capital released a report questioning the company’s business strategy. The crypto treasury firm’s shares initially dropped over 5% in early trading before recovering to close up 1.35% at $60.
Kerrisdale took a short position on BitMine, betting that the stock price would fall. The firm published a report calling BitMine’s approach a “model that is on its way to extinction.”
BitMine operates as an $18 billion Ethereum-focused digital asset treasury company. The firm sells stock at a premium to its crypto holdings and uses the proceeds to buy more ETH.
Tom Lee has proven to be an underwhelming meme lord. No cat videos. No speeches to mortgage your house to buy ETH. Poor utilization of caps lock, emojis, GIFs, AI slop. Too TradFi and boring, Lee pales in comparison to Saylor and Chamath 4/9
— Kerrisdale Capital (@KerrisdaleCap) October 8, 2025
The company was originally a Bitcoin mining operation. It changed strategy earlier this year to focus on acquiring large amounts of Ethereum.
Kerrisdale argues the strategy of selling shares at a premium to increase tokens-per-share is no longer working effectively. The firm notes that BitMine’s premium compared to its net asset value has narrowed from over 2.0x in August to 1.2x by September.
Stock Issuance Concerns
The pace of new stock offerings drew criticism from Kerrisdale. BitMine raised $10 billion over the last three months primarily through at-market share sales.
Kerrisdale stated that the rapid stock issuance has created investor fatigue. The firm said investors now expect every price rally to be met with more share sales.
The short seller particularly criticized a $365 million direct offering completed in late September. BitMine management described the deal as “materially accretive” to shareholders.
Kerrisdale disagreed with that assessment. The firm called it “a discounted giveaway” when factoring in attached warrants.
Leadership and Competition
Kerrisdale also compared BitMine’s executive chair Tom Lee to Strategy’s Michael Saylor. The firm said Lee brings name recognition but doesn’t command the same following that allows Saylor to issue billions in stock without losing investor support.
The report stated BitMine’s strategy requires “scarcity, charisma, and presumably something more innovative” than standard stock issuance. Kerrisdale claims the company offers none of these elements.
The competitive landscape for crypto treasury companies is growing. US-listed firms pursuing similar strategies plan to raise over $100 billion in capital this year, according to The Block.
BitMine currently holds 2.83 million ETH valued at over $12.5 billion. Kerrisdale calculates this equals approximately 9 Ether per 1,000 shares.
Kerrisdale clarified its position isn’t a bet against Ethereum itself. The firm simply argues investors shouldn’t pay a premium for ETH through BitMine stock.
The report suggested investors could buy Ethereum directly on exchanges, stake it for yield, or purchase ETH through exchange-traded funds. These alternatives would avoid the premium and dilution from constant share offerings.
Kerrisdale has previously targeted other crypto companies including Riot Platforms and Strategy. Riot called Kerrisdale’s previous report “unsound conclusions” while Strategy chair Michael Saylor has continued promoting his company’s appeal to investors.
