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Why Bitmine Immersion Technologies Sank by 10% on Monday
Key Points
Bitmine Immersion Technologies (NYSEMKT: BMNR) faced unfavorable timing with its latest capital raising effort. The cryptocurrency mining and holding company, primarily focused on Ethereum, saw its share price drop by over 10% on Monday following the announcement of a share sale. This occurred on a trading day when the S&P 500 index ended with a 0.4% gain.
A Big Share and Warrant Sale
That morning, Bitmine disclosed that it had signed a purchase agreement with an institutional investor to acquire slightly over 5.2 million shares of its common stock. This unnamed investor agreed to a purchase price of $70 per share. Furthermore, the investor received warrants to purchase an additional package of over 10.4 million shares at an exercise price of $87.50 each. Bitmine noted that the potential future proceeds from the warrants amount to approximately $913 million, assuming cash exercises. Altogether, the company stated that the total possible intake from these transactions could be roughly $1.28 billion.
Future 5% Holder?
Bitmine has set an ambition to acquire 5% of the total available Ethereum. Conveniently, and also on Monday, it provided an update on its Ethereum holdings. In a press release, the company stated that its Ethereum portfolio now accounts for over 2% of the supply. This significant increase was fueled by $20 billion in equity financing in late August, allowing Bitmine to acquire nearly 200,000 Ethereum. Before this acquisition, Bitmine held less than 1% of Ethereum, marking a noteworthy expansion of its holdings.
Unfortunately for Bitmine, these announcements coincided with a general cryptocurrency sell-off over the weekend, which continued into Monday's trading. Timing is crucial in the crypto market; however, investor sentiment towards Bitmine could improve dramatically if Ethereum begins to increase in value again.
Should You Buy Stock in Bitmine Immersion Technologies Right Now?
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This article has been published in fool.com via Yahoo News.
Why Bitmine Immersion Technologies Sank by 10% on Monday
The specialty crypto player taps a deep-pocketed investor for new funding.
finance.yahoo.com
