A Strategic Move to Bolster Share Value

ETHZilla, a significant corporate holder of Ethereum (ETH), has sold $40 million worth of the cryptocurrency from its reserves. The company confirmed that the sale, approved by its board, is designed to raise capital for a strategic share buyback program.

According to the announcement, $12 million of the proceeds have already been used to repurchase company shares. Even after this transaction, ETHZilla maintains a substantial crypto position, with its remaining Ethereum holdings valued at approximately $400 million.

Tackling the Net Asset Value Discount

The primary goal of the initiative is to address the discount at which the company’s stock has been trading relative to its net asset value (NAV). The company stated it plans to continue selling its ETH holdings until the gap between its market price and NAV narrows.

McAndrew Rudisill, ETHZilla’s board chair, explained that the buybacks will reduce the number of outstanding shares and increase the net asset value per share. He also suggested the move is expected to have a limiting effect on short-selling.

Market Responds to Buyback News

Investors reacted positively to the strategy. Following the announcement, ETHZilla’s stock saw a significant rally, closing at $20.65, a 14.53% increase from the previous day.