TLDR
- BitMine Immersion approved a $1 billion open-ended stock buyback program to repurchase shares trading below net asset value
- The company holds 625,000 ETH worth $2.35 billion and 192 Bitcoin, with total crypto and cash holdings of $2.77 billion
- BitMine’s net asset value per share is $22.76, while shares currently trade at $31.70, down from a high of $161 three weeks ago
- Chairman Tom Lee calls this part of BitMine’s “alchemy of 5%” strategy to eventually own 5% of total Ethereum supply
- Competitor Sharplink Gaming acquired an additional 77,209 ETH, bringing their total to 438,190 ETH worth around $1.6 billion
BitMine Immersion Technologies has approved a $1 billion stock buyback program to repurchase outstanding shares through open market transactions. The move comes as the company’s shares trade below its net asset value.
The Bitcoin mining company and Ethereum’s largest publicly traded holder made the announcement on Monday. BitMine currently holds 625,000 ETH valued at $2.35 billion and 192 Bitcoin.
The company’s total crypto and cash holdings have reached $2.77 billion. This includes $401.4 million in unencumbered cash that could fund a portion of the buyback directly.
BitMine’s net asset value per share stands at $22.76 according to the press release. The stock currently trades at $31.70, down from a peak of $161 reached three weeks ago.
Chairman Tom Lee said the buyback represents part of the company’s long-term strategy. “In our road to achieving ‘the alchemy of 5%’ of ETH, there may be times when the best expected return of our capital is to acquire our shares,” Lee stated.
The company appointed Lee as chairman on July 8 following its June 30 announcement. BitMine set a goal to acquire and stake up to 5% of the total Ethereum supply.
Strategic Focus on Ethereum Holdings
Lee has outlined the company’s Ethereum strategy through monthly updates called “The Alchemy of 5%.” In recent communications, he described Ether as “the most important macro trade for the next decade.”
The chairman pointed to stablecoins as a key driver for Ethereum adoption. He called stablecoins “the ChatGPT moment for crypto” and noted that about half of all stablecoins are issued on Ethereum.
BitMine continues generating operating income through Bitcoin mining operations. The company uses immersion cooling technology to improve mining efficiency.
The buyback program represents a shift in capital allocation strategy. Rather than purchasing more ETH at current prices, BitMine is focusing on share repurchases while its stock trades below net asset value.
Competition in Ethereum Holdings
BitMine faces competition from other companies building Ethereum reserves. Sharplink Gaming Inc. announced the acquisition of an additional 77,209 ETH on Monday.
This purchase brings Sharplink’s total holdings to 438,190 ETH, worth approximately $1.6 billion. Sharplink chairman Joe Lubin said the company maintains a cautious approach to acquisitions.
“No matter what we do, we’re going to keep leverage very much in check,” Lubin told Bloomberg. He added that Sharplink can “accumulate more Ether per fully diluted share — much faster than any other Ethereum-based project.”
A Standard Chartered Bank report shows public companies have purchased 1% of all ETH in circulation since June. Report author Geoffrey Kendrick said “ETH treasury companies are just getting started; they will likely 10x from here.”
The buyback program is open-ended with no specific timeline for completion.
