ETHZilla, the biotech-turned-Ethereum treasury firm, has approved a $250 million stock buyback program, highlighting how corporate treasuries are starting to leverage crypto profits for liquidity. But analysts caution that the playbook could carry dangerous leverage risks.
The board authorized the repurchase of up to $250 million of common stock out of 165.4 million shares outstanding. The move follows ETHZillaās recent rebrand and pivot into Ethereum, which revitalized its struggling stock.
So far, the company has acquired 102,237 ETH at an average of $3,948, investing just over $403 million. At todayās market price, those holdings are worth $489 million, with a portion staked via Electric Capital.
Still, ETHZilla faces weak fundamentals, with $141.5 million in accumulated losses and limited revenues. Analysts suggest the buyback may be more about short-term stock support than long-term planning.
āCrypto treasuries can outperform ETFs by offering staking and DeFi yields,ā said Kadan Stadelmann, CTO at Komodo. āBut excessive leverage is a ticking time bomb in a bear market.ā
Roughly 3.4% of Ethereumās total supply is now concentrated in corporate treasuriesāāāa figure that raises both opportunity and systemic risk.
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