- ETHZilla sold approximately $40 million worth of ether (ETH) from its treasury on October 24.
- The company used part of the proceeds to repurchase about 600,000 shares for nearly $12 million.
- These buybacks are part of a broader $250 million plan approved by the board, aiming to reduce shares available for short selling and increase net asset value (NAV) per share.
- Despite the sale, ETHZilla still holds around $400 million in ETH, planning further sales to fund additional buybacks.
- The stock price surged by 14.5% on Monday and gained another 12% in after-hours trading following the buyback news.
On October 24, ETHZilla, a digital asset treasury firm focused on Ethereum, sold about $40 million worth of ether (ETH) from its holdings. The company announced it has started using some of the cash raised from this sale to repurchase its own stock.
Since the sale, the firm has bought back roughly 600,000 shares at an approximate cost of $12 million. These repurchases are part of a $250 million stock buyback plan that ETHZilla’s board has approved. The company said it will continue to repurchase shares with the remaining cash raised and plans to keep selling ETH to fund further buybacks until the discount to net asset value (NAV) is reduced.
Currently, ETHZilla still holds around $400 million in ether. The company indicated that the October 24 ETH sale likely occurred when the price of ether was near $3,900. Afterward, the price increased to about $4,250 before settling near $4,150. The timing of the sale may not have been ideal in terms of price, but the buyback effort is aimed at discouraging stock short selling below NAV.
Following the buyback announcement, shares of ETHZilla rose sharply, climbing 14.5% on Monday alongside a rally in digital asset treasury stocks. The stock increased by an additional 12% in after-hours trading.
Digital asset treasury companies have faced challenges as many of their stocks traded below the NAV of their holdings, limiting their ability to raise funds for crypto purchases. Data shows ETHZilla’s stock dropped about 90% from its August high and traded at a roughly 30% discount to NAV. The firm’s chairman and CEO, McAndrew Rudisill, stated, “By opportunistically repurchasing shares while our stock is trading below NAV, we plan to reduce the number of shares that are available for stock loan/borrow activity, while increasing the NAV per share of the company.” For further details, see the original release and related Blockworks data.
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