ETHZilla Bets Big on Ether Treasury With Massive $250M Stock Buyback

TLDR

• ETHZilla authorized a $250 million stock repurchase program running until June 2026
• The company holds 102,237 ETH worth approximately $489 million at current prices
• ETHZilla acquired its ether at an average price of $3,948.72, spending over $403 million
• The firm introduced its Electric Asset Protocol to generate higher yields on crypto holdings
• Shares dropped 30% Friday after disclosure of potential 74.8 million convertible share offering

ETHZilla has approved a $250 million stock buyback program as the company continues expanding its ether treasury holdings. The Florida-based firm’s board authorized the repurchase effective immediately.

The program will run until June 30, 2026, or until the full allocation is used. ETHZilla currently has 165.4 million shares outstanding as of August 22.

The company now holds 102,237 ETH acquired at an average price of $3,948.72. This represents a total investment of just over $403 million in ether purchases.

At current market prices, the ether holdings are valued at approximately $489 million. The company also maintains roughly $215 million in U.S. dollar cash equivalents.

Growing Ether Treasury Strategy

ETHZilla recently pivoted from biotechnology to focus on cryptocurrency as its core strategy. The company rebranded from 180 Life Sciences less than a month ago.

The pivot has helped revive the company’s stock performance. ETHZilla’s share price has benefited from its new ether treasury focus.

Executive Chairman McAndrew Rudisill said the buyback program demonstrates commitment to maximizing shareholder value. He cited the company’s scaling ether reserves and pursuit of yield opportunities.

ETHZilla plans to stake its most recent ether purchases with Electric Capital. The company also introduced its proprietary Electric Asset Protocol.

Market Challenges and Risks

The Electric Asset Protocol aims to generate higher yields on the company’s crypto holdings. This represents part of ETHZilla’s strategy to differentiate its ether treasury approach.

However, the company faces ongoing financial challenges. ETHZilla reported an accumulated deficit of over $141.5 million last year as a public company.

The firm has struggled with limited revenues and persistent losses. Shareholder dilution has also been an ongoing concern for investors.

ETHZilla shares dropped nearly 30% on Friday following news of a potential convertible share offering. Shareholders filed to offer up to 74.8 million convertible shares.

The stock was trading around $3.15 at publication time, down 4.5%. This represents continued volatility despite the ether treasury strategy gains.

ETHZilla joins other companies embracing cryptocurrency as a balance sheet asset. Firms like BitMine Immersion Technologies and The Ether Machine have made similar strategic moves.

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