Short-Seller Kerrisdale Capital Targets Tom Lee’s Bitmine Immersion in New Campaign

Short-seller Kerrisdale Capital has taken a short position in BitMine Immersion (BMNR), the ether-focused digital asset treasury firm led by Fundstrat co-founder Thomas Lee, labeling its business model as outdated and unsustainable.

In a report released Wednesday, Kerrisdale said BitMine’s approach mirrors that of Strategy (MSTR)—raising capital via share issuance to buy crypto and grow token-per-share metrics—but argued current market conditions no longer support this play.

“BMNR is chasing a model that is on its way to extinction,” Kerrisdale wrote. “Scarcity and meme-like enthusiasm once sustained premiums despite continuous dilution, but those conditions are gone.”

Kerrisdale previously shorted Strategy while holding a long position in bitcoin, noting that the company’s premium to net asset value was unsustainable, a bet that has proven profitable.

Rapid Expansion and Stock Performance

Over the past year, Las Vegas-based BitMine shifted from a niche bitcoin miner to an ether-heavy corporate treasury. Under Lee’s leadership as executive chairman, the firm has raised over $10 billion since July 2025—primarily through at-the-market (ATM) stock offerings—and accumulated more than 2.8 million ETH.

Shares surged from around $5 to over $100 after the ether strategy was unveiled, but have since fallen back to roughly $58. Kerrisdale criticized the pace of stock issuance, about $170 million per day, as turning early enthusiasm into fatigue. The report also labeled the company’s recent $365 million equity raise, marketed as a premium deal, a “discounted giveaway” after accounting for warrants.

Leadership and Transparency Concerns

Kerrisdale also questioned Lee’s influence, saying he lacks the cult-like following that helped figures like Michael Saylor maintain market momentum. “Tom Lee brings recognition as a strategist and media personality, but he does not command the kind of investor pull that makes a difference,” the report noted.

The report highlighted rising opacity in BitMine’s disclosures. ETH-per-share growth has slowed despite rising holdings, with the firm’s market premium dropping from 2.0x in August to about 1.2x in October.

Competition and Market Pressure

Competition is increasing rapidly. Over 150 U.S.-listed firms are reportedly planning $100 billion in crypto treasury offerings, and upcoming Ethereum ETFs could provide cheaper and more transparent exposure. Kerrisdale concluded that BitMine’s generic strategy, mounting competition, and slowing ETH-per-share growth make its premium likely to decline.

“BMNR’s strategy is generic, competition is growing, and disclosures are increasingly opaque,” Kerrisdale wrote. “Its premium is destined to sink.”

BitMine did not respond to a request for comment. Shares fell 2% Wednesday.

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