Ethereum treasury fund ETHZilla (ETHZ) has divested about 40 million dollars worth of ether (ETH) to carry on its share repurchase program. The repurchase is only one part of a $250 million buyback plan, which was authorized by the firm’s board in January to reduce the number of shares in circulation and increase the valuation.
After the announcement, ETHZ’s share price went up significantly, ending the day 14.5% higher and adding another 9% at the time of writing, according to Google Finance. Although the stock is still far from its peak of around $107 when the company initially started amassing an Ethereum treasury, it is now trading at more than $22.50.
ETHZilla stated that the company will be buying back its common stock as long as it “continues to trade at a considerable discount to NAV.” The company used the money from its recent ETH sale on October 24 to repurchase about 600,000 shares for $12 million.
Chairman McAndrew Rudisill stressed the importance of this strategy to the firm, saying that ETHZilla plans to keep selling parts of its ETH holdings to raise cash for more buybacks. The ultimate goal is to standardize the discount to the company’s net asset value thus strengthening shareholder trust and increasing the real value.
After the sale, ETHZilla continues to hold a hefty $400 million worth of ETH on its balance sheet, making it one of the major Ethereum treasury players. In August, Peter Thiel’s Founders Fund acquired a 7.5% stake in the company, demonstrating a high level of institutional trust in ETHZilla’s long-term treasury management.
The company, formerly 180 Life Sciences Corp., is now one of the Ethereum treasuries, along with SharpLink Gaming (SBET), which has also announced a buyback plan of up to $1.5 billion, thus imitating ETHZilla’s approach to stabilizing share value during times of market volatility.
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