Kerrisdale Capital Shorts BitMine Immersion BMNR Calling Ethereum Strategy Outdated

Hedge fund Kerrisdale Capital has initiated a short position against BitMine Immersion (BMNR), the Ethereum-focused digital asset firm chaired by Fundstrat's Tom Lee, declaring its business model obsolete in today's crypto landscape. In a comprehensive report, the prominent short-seller asserted that BitMine's approach mirrors MicroStrategy's strategy of issuing premium-priced shares to acquire cryptocurrency and boost tokens-per-share metrics, but contends current market conditions no longer support this framework. Kerrisdale stated "BMNR is pursuing a model facing extinction," noting that scarcity dynamics and meme-driven enthusiasm that previously sustained premiums have dissipated. The firm previously profited from shorting MicroStrategy against bitcoin positions, observing unsustainable NAV premiums. BitMine executed a dramatic transformation from bitcoin mining to an Ethereum-centric corporate treasury, raising over $10 billion since July 2025 through ATM stock offerings and accumulating more than 2.8 million ETH. While shares surged from $5 to over $100 following this strategic shift, they've since retreated to approximately $58. The report criticized BitMine's accelerated stock issuance pace of roughly $170 million daily, claiming it has "transformed early excitement into investor fatigue." Kerrisdale also questioned Tom Lee's influence, noting he lacks the "cult-like following that elevated Michael Saylor to meme-stock icon status." Despite maintaining bullish Ethereum outlook, Kerrisdale sees no rationale for paying premiums through intermediaries like BitMine, advising investors to "buy ETH directly." Mounting competition from 150+ US-listed firms planning $100 billion in crypto treasury offerings and upcoming Ethereum ETFs further pressures BMNR's model. Kerrisdale highlighted deteriorating transparency in BitMine's disclosures, with ETH-per-share growth decelerating despite increasing token holdings. The firm observed BMNR's market premium collapsing from 2.0x in August to 1.2x in October, concluding "BMNR's premium is destined to sink" amid generic strategy, proliferating competition, and opaque reporting. BitMine shares declined 2% Wednesday with no immediate company comment.