Kerrisdale Capital singled out Bitmine Immersion Technologies (BMNR) in a public short report after the company Tom Lee steers shifted from Bitcoin mining to hoarding Ethereum. The report questions whether the “Ethereum treasury strategy” can last, and the share price dropped at once. Owners of the stock, heavy ETH holders and traders who judge balance sheets by crypto reserves all took notice.
Kerrisdale attacks what it labels BMNR’s “Ethereum treasury strategy,” arguing the firm now treats stacking ETH as its main job. The fund writes that BMNR funds each purchase by printing shares—cash flow never enters the loop—and only a speculative premium keeps the cycle alive. The approach is “chasing a model that is on its way to extinction”. Immersion cooling submerges ASIC rigs in dielectric fluid to cut heat and raise efficiency.
The numbers in circulation are large: BMNR holds roughly ~2.83 million ETH and reports about ~$13.4 billion in combined crypto and cash. Recent moves include a $250 million private placement, a $1 billion buyback and a shelf filing that seeks up to $2 billion more for ETH, with each announcement triggering violent swings in the share price.
From immersion mining to an Ethereum treasury
Kerrisdale lists four concrete dangers that tie BMNR’s profile to Ethereum and financing dynamics.
A swollen ETH reserve ties the balance sheet to the asset’s price swings. Repeated share sales dilute investors and feed the reflexive cycle.
A high profile short report can curb demand for future raises and widen volatility. The switch from immersion mining to passive treasury work alters the revenue profile.
Market reactions have been abrupt, with sharp rallies and collapses after news and the report. The public short adds pressure on future fundraising and could amplify volatility.
The next checkpoint is the $2 billion raise: if it completes, the model survives a little longer; if it fails, the strategy loses credibility.
