Short-Seller Storm Hits BitM - And Its $12.5 Billion Ethereum Pile

BitMine Immersion Technologies — the company that has drawn massive attention after transforming itself into the largest publicly listed holder of Ethereum — is now facing a sharp attack from one of Wall Street's most prominent short-selling firms.

On Wednesday, Kerrisdale Capital announced that it had taken a short position in BitMine, calling the Tom Lee–led company "a business chasing an obsolete model." In its report, Kerrisdale argued that BitMine's strategy of issuing new shares at a premium to purchase Ethereum — thereby increasing its per-share cryptocurrency holdings—has lost its effectiveness.

According to Kerrisdale, as BitMine's market valuation premium relative to its crypto assets has narrowed, the appeal of its business model has weakened. The firm also criticized BitMine's frequent share issuances, saying they have triggered "investor fatigue."

Following the release of the report, BitMine's stock experienced heavy volatility on Tuesday. The stock opened above $60, fell more than 5% in early trading to an intraday low of $57.41, but later reversed course and closed up 1.35% at $60.

Earlier this year, BitMine shares had soared as high as $130 , but have since been cut nearly in half. Despite that, the stock remains up an astonishing 17,042% year-to-date.

A Shrinking Premium Threatens the "Buy-Crypto" Model

BitMine pivoted earlier this year from a bitcoin mining company to an aggressive Ethereum accumulation strategy, quickly becoming the largest public holder of the token. According to Kerrisdale's report, BitMine currently holds 283 million ETH, valued at over $12.5 billion, or roughly 9 ETH per 1,000 shares. It is one of dozens of "crypto treasury companies" that seek to attract investors by purchasing large amounts of digital assets.

Kerrisdale's main argument centers on the sustainability of this model. The short-seller claims BitMine's strategy of selling stock at a premium to acquire Ethereum is breaking down as the company's market-to-net-asset-value multiple (mNAV) premium narrows — from over 2.0x in August to just 1.2x in September.

The report also lambasted BitMine's pace of share issuance, stating the company has raised $10 billion in the past three months primarily through at-the-market offerings.

"The sheer velocity of BMNR's stock issuance has turned early enthusiasm into fatigue," Kerrisdale wrote. "Investors conditioned to believe every rally will be met by more supply."

The firm also pointed to BitMine's late-September $365 million stock offering, calling it a "discounted giveaway" and "a cleverly packaged dilutive raise that sacrificed long-term credibility for short-term cash."

Leadership and Transparency Under Fire

Kerrisdale's report also aimed BitMine's executive chairman, Tom Lee. While acknowledging that Lee has brought visibility to the company, the report claimed he " does not command the kind of cult-like following that turned Michael Saylor into a meme-stock icon  able to issue billions in equity without losing investor enthusiasm."

According to Kerrisdale, BitMine's approach "requires scarcity, charismatic leadership, and something more innovative than just issuing stock above NAV"—but the company "delivers none of the above."

The short-seller also accused BitMine of reduced transparency, noting that the firm has stopped reporting its per-share net asset value (NAV) — once a key metric — as growth has slowed.

Kerrisdale emphasized that its short position "is not a bet against Ethereum itself, but against the notion that investors should continue paying a market premium for it through BitMine." The report argued that BitMine's value proposition — offering something supposedly better than direct token ownership — no longer holds up amid rising competition and diminished disclosure:

A Familiar Target

Kerrisdale has previously targeted other crypto-linked firms, including Riot Platforms , a bitcoin miner, and Strategy, a bitcoin accumulation company. At the time, Riot publicly dismissed Kerrisdale's findings as "unfounded and unreasonable."

Now, BitMine finds itself in similar crosshairs — with investors questioning whether its spectacular rise represents genuine innovation, or simply the latest iteration of a speculative cycle nearing its end.