Ethereum Treasury Firm ETHZilla Rises as Beyond Meat Investor Spurs Buyback Strategy
Introduction
In a significant market development, shares of Ethereum treasury firm ETHZilla (ETHZ) surged 14% on Monday, extending gains seen late last week. This rally was directly spurred by Dimitri “Capybara Stocks” Semenikhin, the investor and influencer renowned for his role in the recent Beyond Meat (BYND) meme stock phenomenon, taking a position in the firm and advocating for strategic changes. Following his public endorsement and an open letter to management, ETHZilla announced it had sold approximately $40 million worth of Ethereum (ETH) to execute a substantial share buyback. This move highlights a growing focus on corporate treasury management within the crypto sector and demonstrates the increasing influence of a new class of digital-native investors on traditional corporate governance.
Who is Dimitri “Capybara Stocks” Semenikhin?
Dimitri Semenikhin, known online as “Capybara Stocks,” recently gained prominence for his involvement with Beyond Meat. He was a key figure in helping push BYND to a more than 1,000% price spike last week, drawing comparisons to Keith “Roaring Kitty” Gill, the unofficial ambassador of the 2021 GameStop meme stock rally. With the fervor around BYND subsiding, Semenikhin has pivoted his focus toward identifying value in other markets. His strategy appears to involve leveraging his newly expanded audience on platforms like X and YouTube to spotlight investments he deems undervalued, shifting from high-volatility meme stocks to what he describes as more "risk-averse" opportunities with "asymmetric upside."
The Investment Thesis: A Discount to Net Asset Value
Semenikhin’s interest in ETHZilla is rooted in a fundamental value proposition. He claims to have purchased around 2.2% of the firm’s shares, citing the steep discount between its market capitalization and the net value of its assets. In a statement to Decrypt, he explained his rationale: “Treasury bets are really measured by the multiplier they have on their net assets. ETHZilla’s multiplier at the time of my purchase was at an all-time low of 50%, and is even now well below other digital treasuries still, trading at 65-70% of its liquid/cash asset value.” This discount meant that investors could buy shares in ETHZilla for significantly less than the value of the Ethereum held on its balance sheet, presenting a potential arbitrage opportunity if the gap were to close.
An Open Letter and an Immediate Corporate Response
The catalyst for Monday’s price action was a direct appeal from Semenikhin to ETHZilla’s management. “Today, I’ve published an open letter to the company’s management, as I believe it has been greatly underutilizing its ability to buy back its shares as part of the already authorized share buyback program,” he stated. He argued that it was abnormal for an investor to be able to accumulate such a large position while the firm traded at a deep discount, asserting, “The company should have bought back these shares themselves.” The corporate response was swift. Less than an hour after the open letter was posted, ETHZilla announced it had sold a portion of its ETH holdings and repurchased around $40 million worth of its own shares.
ETHZilla’s Treasury and Buyback Program in Focus
ETHZilla is a significant player among publicly traded companies holding Ethereum in their treasury. As of Monday, prior to its sale, the firm ranked sixth among such entities, holding 102,916 ETH—a treasury valued at approximately $434 million. Following the $40 million ETH sale for the buyback, the company stated it still holds around $400 million in Ethereum. This action is part of a broader $250 million share buyback program unveiled in August, designed to return value to shareholders. Chairman and CEO McAndrew Rudisill confirmed the strategy, stating, "We are leveraging the strength of our balance sheet, including reducing our ETH holdings, to execute share repurchases." The firm committed to continuing this strategy as long as its market price trades below its net asset value (mNAV < 1).
Recent Volatility and Strategic Moves by ETHZilla
ETHZilla’s shares have experienced notable volatility. Last week, the stock dipped as low as $12.78 before rebounding sharply to close at $20.65 on Monday and reaching $23.00 in after-hours trading following the buyback news. This contributed to a jump of more than 20% over the prior five trading days. Another critical strategic move preceded this rally: last week, the firm completed a 1-for-10 reverse stock split. This corporate action is typically employed to boost the nominal share price, often with the goal of meeting listing requirements or attracting a broader base of institutional investors who may have policies against investing in low-priced stocks.
A Look at ETHZilla’s Notable Shareholders
Beyond the newfound attention from Semenikhin, ETHZilla boasts other high-profile investors. Most notably, billionaire Peter Thiel and related entities purchased a 7.5% stake in the company in August, an event that itself led to a previous spike in the stock price. The presence of a seasoned investor like Thiel alongside a meme stock influencer like Semenikhin creates a unique shareholder base, blending traditional venture capital confidence with the potent, community-driven dynamics of modern social media investing.
Comparing Meme Stock Mania and Treasury Value Plays
Semenikhin’s pivot from Beyond Meat to ETHZilla represents a fascinating evolution in influencer-led investment strategies. The BYND surge was characteristic of classic meme stock mania, driven by social sentiment and retail trader coordination. In contrast, his advocacy for ETHZilla is framed around fundamental balance sheet analysis—specifically, the discount to net asset value. As Semenikhin stated, “After the success of my Beyond Meat investment... I wanted to showcase... that there are also more risk-averse investments that can be made with asymmetric upside at the same time to showcase values around responsible and opportunistic investments.” This suggests a potential maturation in approach, using meme stock-generated influence to promote value-based propositions.
Conclusion: A New Paradigm for Crypto Equities?
The events surrounding ETHZilla underscore a broader trend where the lines between crypto-native assets and traditional equity markets continue to blur. The rapid response from ETHZilla’s management to an influencer’s public letter demonstrates the growing power of shareholder activism in the digital age. For investors and market watchers, this case highlights several key areas to monitor moving forward. First, watch for continued execution of ETHZilla’s buyback program and whether it successfully narrows the discount to NAV. Second, observe if other crypto treasury firms face similar pressure from investors seeking to unlock latent balance sheet value. Finally, this episode reinforces that corporate governance and capital allocation strategies are becoming just as critical for crypto-focused public companies as their underlying digital asset holdings. The convergence of meme stock influence and fundamental value investing may well set a new precedent for how crypto equities are evaluated and influenced in the future.