Kerrisdale Capital has initiated a short position on BitMine Immersion (BMNR), the ether-focused digital asset treasury led by Fundstrat co-founder Thomas Lee, calling its business model outdated and investor appeal weak.
In a report released Wednesday, the short-selling firm compared BitMine’s approach to Strategy (MSTR), which relies on issuing shares at a premium to acquire crypto and boost token-per-share metrics. Kerrisdale argued that current market conditions no longer support this strategy. “BMNR is pursuing a model headed for extinction,” the report said.
Over the past year, BitMine shifted from bitcoin mining to an ether-heavy corporate treasury, raising more than $10 billion and acquiring over 2.8 million ETH. Shares initially soared from $5 to over $100 but have since pulled back to roughly $58.
Kerrisdale criticized the speed of stock issuance, describing a recent $365 million equity raise as a “discounted giveaway,” and questioned Lee’s influence, noting he lacks the cult-like following of other crypto leaders. Rising competition and slowing ETH-per-share growth compound pressure on BitMine’s market premium.
The company’s shares dropped 2% Wednesday, reflecting investor caution amid growing scrutiny.
