ETHZilla sold off $40 million worth of ETH to begin its share repurchase program.
The company has repurchased 600,000 shares for $12 million under a $250 million stock repurchase program.
Meme stock investor Seminikhin earlier urged ETHZilla to conduct buybacks by selling ETH, considering its stock price is below NAV.
Ethereum treasury firm ETHZilla (ETHZ) announced on Monday that it has sold $40 million worth of ETH to kick off its stock buyback program, according to a statement.
The company initiated the sale on October 24 and has already repurchased 600,000 shares for $12 million under a $250 million stock repurchase program approved by its shareholders in August.
"We are leveraging the strength of our balance sheet, including reducing our ETH holdings, to execute share repurchases," said McAndrew Rudisill, chairman and chief executive officer of ETHZilla. We expect these repurchases to be immediately accretive, using cash raised through the sale of our ETH, while our common shares trade at a significant discount to NAV."
ETHZilla, which boasts of investors including Peter Thiel's backed Founder's Fund, saw its net asset value (NAV) plunge below its market capitalization over the past few months.
Meme stock influencer urges ETHZilla to continue selling ETH to conduct share buybacks
Meme stock investor Dimitry "Capybara Stocks' Seminikhin, who was behind the price surge of Beyond Meat (BYND), revealed he has taken a position in ETHZilla.
Prior to the share buyback, Seminikhin highlighted in an open letter that the company is "not utilizing the opportunity to maximize NAV /share growth by buying back below NAV despite the large discount to NAV at which the stock is currently trading."
He urged ETHZilla to sell a portion of its Ethereum holdings to fund the share buyback, provided prices remain below NAV.
"Whilst I understand the optics of an Ethereum sell could appear poor, I believe investors both institutional and retail are now familiar enough with ETHZilla's valuation that they would support this move on your behalf and view it for what it is - accretive to shareholders," added Seminikhin.
A few hours after Seminikhin published the letter, ETHZilla confirmed that it had sold $40 million worth of ETH to fund its share repurchase program.
ETHZilla's share price closed trading with a 14% gain on Monday following the sale. Meanwhile, ETH dipped by 2.5% over the past 24 hours.
The company states it continues to hold about $400 million in ETH, making it the fifth-largest publicly traded Ethereum treasury.
While ETHZilla scaled back its holdings, BitMine Immersion (BMNR) said on Monday that it had acquired over 77,000 ETH, boosting its Ethereum stash to 3.31 million ETH, worth about $13.3 billion.
