BitMine Immersion Technologies (BMNR), an Ethereum treasury firm spearheaded by Tom Lee, co-founder of Fundstrat, is set to launch a $300 million preferred stock offering, following a trend established by other companies in the crypto sector. This move comes as digital asset treasury firms seek innovative ways to secure funding amidst a challenging market landscape.
According to a recent filing with the U.S. Securities and Exchange Commission (SEC), BitMine will offer 3 million shares of its Series A Perpetual Preferred Stock, each with a stated value of $100. These securities promise a competitive annual dividend rate of 9.5%, with cash dividends paid weekly contingent upon approval from the company’s board.
Once finalized, the preferred shares are expected to be listed on the New York Stock Exchange (NYSE) under the ticker symbol BMNP, pending regulatory approval. The timing of this offering aligns with a broader trend in the industry, as firms like Strategy (MSTR), the largest corporate Bitcoin holder, have begun to diversify their funding strategies through various classes of preferred equities. Similarly, another competitor, Strive (ASST), has also issued dividend-paying preferred stock.
BitMine’s approach mirrors these strategies, aiming to bolster its Ethereum treasury framework. Over the past year, the firm has aggressively purchased more than 5.3 million ETH, translating to an investment of around $10 billion, which accounts for about 4.5% of Ethereum’s circulating supply. However, this investment comes with significant risk, as it currently reflects an estimated unrealized loss of $9 billion, following a substantial decrease in ETH prices that have dropped below $1,800 from highs of approximately $5,000 in October.
The newly issued preferred stock will provide certain features beneficial to investors, including the ability for the company to redeem shares at premiums that vary from 10% to 0% based on the timing of the redemption. Additionally, holders will be granted repurchase rights under specific fundamental corporate changes. However, the filing did not clarify how BitMine plans to utilize the proceeds from this offering.
The market conditions are particularly precarious for strategies like BitMine’s, as recent fluctuations have raised concerns about the sustainability of dividend payments among digital asset treasury firms. Following a decline, Strategy’s STRC preferred stock fell to 5% below its $100 par value, prompting investor speculation about the company’s ability to maintain dividend payouts amid declining Bitcoin prices. Likewise, Strive’s SATA shares traded below $97, illustrating the intense scrutiny faced by preferred equity funding models in the current crypto environment.
