Kerrisdale Capital said Wednesday it has taken a short position in BitMine Immersion (BMNR), the ether-focused (ETH-USD) digital asset treasury firm led by Fundstrat co-founder Thomas Lee. The short seller described BitMine’s business as a “relic of a bygone crypto era,” arguing its strategy of issuing shares to buy crypto is no longer viable.
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In its report, Kerrisdale said that BitMine’s model copies that of Strategy (MSTR), which issues stock to purchase bitcoin and grow token-per-share metrics. The firm believes current market conditions make that playbook unsustainable.
“BMNR is chasing a model that is on its way to extinction,” the report said. “Scarcity and meme-like enthusiasm once kept premiums high despite constant dilution, but those conditions have vanished.”
Kerrisdale added that while it remains bullish on ether, it sees no reason to gain exposure through intermediaries. “If you want ETH, just buy it directly,” the firm wrote.
From Miner to Mega Treasury
Based in Las Vegas, BitMine has transformed rapidly over the past year. The company pivoted from bitcoin mining to an ether-heavy corporate treasury strategy, raising more than $10 billion since July through at-the-market stock sales. It now holds over 2.8 million ETH, according to its latest filings.
The pivot initially sparked a massive rally. BitMine’s shares soared from about $5 to more than $100 after launching its new ether treasury plan. The stock has since pulled back sharply, trading around $58 this week.
Kerrisdale said the pace of BitMine’s share issuance, averaging about $170 million per day, has “turned early enthusiasm into fatigue.” The firm also criticized the company’s most recent $365 million equity raise, calling it a “discounted giveaway” once warrants were included.
Kerrisdale Questions Tom Lee’s Leadership
The report singled out Executive Chairman Thomas Lee, saying his presence alone is not enough to sustain investor excitement.
“Tom Lee brings name recognition as a strategist and television commentator, but he does not command the kind of cult-like following that turned Michael Saylor into a meme-stock icon,” Kerrisdale said.
The short seller also noted that BitMine’s ETH-per-share growth has slowed in recent months, even as total token holdings increased. “The reflexive loop that every DAT relies on had begun to stall,” the firm wrote.
Competition and Transparency Concerns Exist
Kerrisdale said BitMine now faces a crowded market of rivals launching similar digital asset treasury offerings. More than 150 U.S.-listed companies are reportedly preparing $100 billion in crypto treasury products, and upcoming Ethereum ETFs are expected to provide cheaper and more transparent exposure.
The firm also accused BitMine of weaker disclosure practices. It said the company’s market premium has fallen from 2.0x in August to around 1.2x in October as enthusiasm faded.
“The strategy is generic, the competition is mushrooming, disclosures have grown opaque, ETH-per-share has slowed,” Kerrisdale concluded. “BMNR’s premium is destined to sink.”
Is BitMine a Good Stock to Buy?
Based on TipRanks data, ThinkEquity analyst Ashok Kumar initiated coverage on BitMine Immersion Technologies with a Buy rating and a $60 price target. This target implies a potential upside of about 7.28% from the company’s most recent close.
