Shares of ETHZilla (ETHZ), formerly known as biotech firm 180 Life Science, fell nearly 30% Friday after the company disclosed that shareholders filed to offer up to 74.8 million convertible shares.
The offering sparked concerns about dilution, a process where existing shareholdersâ stakes lose value as more stock enters the market. For investors, it means their ownership slice shrinks, even if the companyâs overall value doesnât change.
After the issuance of new shares, the outstanding shares of the company will rise by about 46% to 239.3 million from 164.4 million, according to the filing. The company won’t receive any proceeds from the shareholders selling their converted shares.
ETHZilla rebranded earlier this month into a crypto treasury company and disclosed that it holds 82,186 ether, worth about $349 million at current prices, alongside $238 million in cash equivalents. The ether was acquired at an average price of $3,806.71 per token. News of the pivot and the size of the holdings sent shares surging on Aug. 11, lifting the stock 80% year-to-date before Fridayâs sharp reversal.
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The strategic shift has also drawn heavyweight backers.
Peter Thiel, who has publicly supported Ethereum, holds a 7.5% stake in ETHZ through his Founders Fund. The fund also owns 9.1% of Bitmine Immersion Technologies, which recently raised $250 million to build its own ether reserves. Thielâs involvement highlights a broader bet by influential investors that Ethereum could anchor the next generation of financial infrastructure.
Ether itself has regained momentum in 2025 after lagging behind other altcoins last year. The token is up 38% year-to-date, outpacing bitcoinâs 24% rise and the CoinDesk 20 Indexâs 17% gain. For context, bitcoin climbed 121% in 2024 while ether added just 31%. The turnaround coincides with regulatory clarity in the U.S. that has prompted Wall Street institutions to adopt Ethereum as a base layer for launching new financial products and services.
Despite the surge in price and interest from investors, ETHZ shares moved against the broader trend on Friday. The Nasdaq, S&P 500 and Dow were all higher after remarks from Federal Reserve Chair Jerome Powell, while ether itself gained 9% in the past 24 hours.
The selloff underscores the tension between ETHZâs promise as a large publicly traded ether treasury and investor unease about near-term dilution. While the companyâs balance sheet puts it among the biggest ether holders in the corporate world, shareholders are weighing whether that promise can outweigh the risks of being cut into smaller pieces.
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