ETHZilla (ETHZ) shares plummeted nearly 30% on Friday following the disclosure of a planned 74.8 million-share offering, raising fresh concerns over shareholder dilution even as the company holds a sizable Ethereum and cash treasury.
In a regulatory filing, ETHZilla revealed that existing shareholders intend to sell convertible shares, which would increase the total outstanding stock by approximately 46%, from 164.4 million to 239.3 million. The company emphasized it will not receive any proceeds from the offering, as the sales are tied to shareholder conversions.
The announcement sharply reversed the positive momentum ETHZilla had built since its recent transformation. Formerly known as 180 Life Sciences, the company rebranded earlier this month to focus on crypto treasury management. It now holds over 82,000 ETH, valued at $349 million, alongside $238 million in cash and equivalents. Its average ETH acquisition price stands at $3,806.71.
Shares had surged earlier in August on news of the pivot, pushing year-to-date gains to 80% before Friday’s sharp selloff. The company’s strategy has also attracted prominent investors — most notably, Peter Thiel, whose Founders Fund owns 7.5% of ETHZ and holds a stake in Bitmine Immersion Technologies, a company actively building its own ether reserves.
While ETH itself has rebounded strongly in 2025 — up 38% YTD, ahead of Bitcoin’s 24% and the CoinDesk 20 Index’s 17% — ETHZ’s stock moved against broader trends on Friday. Major U.S. indices, including the Nasdaq and S&P 500, were higher after Fed Chair Jerome Powell signaled the potential for a rate cut in September. ETH gained 9% on the day.
The selloff in ETHZ reflects growing tension between the company’s appeal as a large, publicly traded Ethereum holder and immediate investor concerns around equity dilution. While its crypto-focused balance sheet sets it apart in traditional markets, the increase in outstanding shares has led investors to question whether near-term gains will be diluted away.
