Ethereum-Focus Digital Asset Treasury Firm Ethzilla (ETHZ) on Froday sells nearly $40 million of ether From its Treasury, so far using some of the cash to repurchase shares of its own stock, the company said on Monday.
Since the sale on October 24, the firm has bought back around 600,000 shares for approximately $12 million. The repurchases are part of a broader $250 million buyback plan approved by its board.
The firm said it plans to continue repurchases with the remaining cash raised. Additionally, it intends to continue selling ETH to fund more purchases “until the discount to NAV normalizes.”
As of now, the firm still holds around $400 million in ETH.
Interestingly, the ETH sales made on Friday were likely made in the $3,900 area – ETH subsequently rose throughout the weekend, trading as high as $4,250 overnight before pulling back to the current $4,150. So while the timing of the ETH sales may not be perfect, the repurchasing effort will certainly send a warning to stock sellers to be wary of getting short on any big discount to NAV.
Ethz shares gained 14.5% Monday amid a major rally in the battered digital Treasury sector. The stock was up another 12% in after-hours trading following the purchase announcement.
The trick is to emphasize the constant pressure of digital asset riches. Many stocks are now trading below the net asset value (NAV) of their underlying holdings as their stock prices have fallen in recent months, limiting their ability to raise funds to expand their crypto holdings. ETHZ has cratered nearly 90% from its August peak, and traded at a 30% discount to its nav, BlockWorks data out.
“By opportunistically repurchasing shares while our stock is trading below NAV, we plan to reduce the number of shares available for stock loan/borrowing activity, while increasing the company’s NAV per share,” chairman and CEO McAndrew Rudisill said in a statement.
