ETHZilla, a former biotechnology firm now fully pivoted into cryptocurrency, has authorized a $250 million share repurchase program.
The decision, announced Monday, allows the company’s board of directors to buy back outstanding common shares in an effort to return value to investors.
The move comes less than one month after the company rebranded from 180 Life Sciences and shifted its strategy to focus on Ethereum.
That pivot has been transformative for ETHZilla’s battered stock, which has rebounded since the firm began positioning Ether as its central treasury asset.
Large ETH Holdings Drive Momentum
ETHZilla disclosed that it has acquired 102,237 ETH at an average purchase price of $3,948.72, spending just over $403 million.
At current valuations, those holdings are worth approximately $489 million.
The company also revealed that its most recent purchases would be staked with Electric Capital, signaling an intent to generate additional yield from its digital assets.
Management cited “market conditions,” “management discretion,” and “alternative uses of capital” as justification for the repurchase — language commonly used in traditional buyback announcements.
Financial Struggles Underneath the Shift
Despite its renewed focus, ETHZilla continues to face underlying financial challenges.
As a public company, it has reported weak revenues, consistent losses, and shareholder dilution.
Its most recent filings showed an accumulated deficit of more than $141.5 million, raising questions about how sustainable its new crypto-driven model may be.
Still, ETHZilla is not the only firm making such a move.
Other companies — including BitMine Immersion Technologies, The Ether Machine, SharpLink Gaming, Bit Digital, and Ether Capital Corp. — have all added Ether to their balance sheets.
Analysts Weigh In on Risks
Observers see echoes of past waves of corporate adoption, such as when companies turned to gold as a balance-sheet hedge.
But analysts warn that leverage and concentration risks could undermine the strategy.
Firms borrowing heavily to accumulate ETH may face worsening financials in the event of a bear market, potentially leading to forced liquidations.
Mike Foy, chief financial officer at Amina Bank, said it is still unclear whether the model can be sustainable.
“It’s important to determine whether companies are pursuing the approach for speculative gains, signaling purposes or as part of a broader strategic plan,” he told Cointelegraph.
“If any of these [purchases] seem strange or out of the ordinary, then this is possibly a sign that this isn’t a long-term plan but rather a short-term share price play.”
Treasury Firms Versus ETFs
Kadan Stadelmann, chief technology officer at Komodo Platform, noted that Ethereum treasury firms offer advantages unavailable to spot ETFs.
“Spot ETFs cannot legally offer staking and DeFi,” he said.
“Ethereum treasury firms offer higher yields.”
However, he warned that the model comes with significant risks.
“ETH treasury firms have risks, such as overleveraging,” Stadelmann cautioned.
In a downturn, that could trigger cascading effects across the ETH market.
Anthony DeMartino, founder and CEO of Sentora Research, highlighted that Ether is the most exposed of all crypto treasuries.
Roughly 3.4% of the asset’s total supply is now held by such entities, amplifying potential market consequences.
