tl;dr
ETHZilla (ETHZ) shares fell 5% after announcing a reverse stock split to attract institutional investors, aiming to raise the stock price above $10.00. The move consolidates 160 million shares into 16 million, aligning with fund requirements while maintaining its Ethereum treasury strategy.
**ETHZilla Shares Drop 5% After Announcing Reverse Stock Split to Attract Institutional Investors**
Shares of ETHZilla (ETHZ), a publicly traded Ethereum treasury firm, fell nearly 5% on Wednesday following the announcement of a 1-for-10 reverse stock split. The move, set to take effect at the market open on October 20, aims to bolster the company’s appeal to institutional investors by raising its stock price above $10.00 per share.
Based in Palm Beach, Florida, ETHZilla cited mutual fund minimum share price requirements as a key rationale for the split. Under the restructuring, every 10 outstanding shares of ETHZ will be consolidated into one, reducing the total share count from approximately 160 million to 16 million. The company stated the decision aligns with institutional standards, enabling broader participation from sophisticated capital and positioning ETHZilla for long-term growth.
The reverse split comes amid a tumultuous period for the firm. Following its rebranding from 180 Life Sciences in July 2023, ETHZilla adopted an Ethereum treasury strategy, securing $425 million via a PIPE (Private Investment in Public Equity) offering. The company’s focus on accumulating Ethereum—currently holding 102,246 ETH, valued at $407 million—has positioned it as the sixth-largest publicly traded Ethereum treasury.
However, the stock’s journey has been volatile. After Peter Thiel and his entities acquired a 7.5% stake, shares surged, briefly trading above $10.00. But the momentum waned, leading to a $250 million share buyback and a sharp decline. On the day of the split announcement, ETHZ closed at $1.83, down nearly 5%, though it remains up over 105% from six months prior.
Despite the recent drop, ETHZilla emphasized that the reverse split does not impact its core Ethereum accumulation strategy. “ETH accumulation is only one part of our business model—we are not a traditional DAT,” said John Kristoff, SVP of Corporate Communications and Investor Relations. The firm is also expanding into tokenization solutions, DeFi protocol integration, blockchain analytics, and traditional-to-digital asset conversion gateways.
“We will update the market on our progress on these and other initiatives in the coming weeks and months,” Kristoff added.
As ETHZilla navigates the evolving crypto landscape, the reverse split underscores its efforts to balance retail and institutional interests while maintaining its focus on Ethereum-driven growth. The company’s ability to attract and retain capital amid market fluctuations will likely remain a critical factor in its long-term trajectory.