Bitmine Immersion Technologies (BMNR -1.63%) stock is surging in Tuesday's trading following news of a major strategic move. The Ethereum-focused crypto holding company's share price was up 4.4% as of 12:40 p.m. ET. Meanwhile, Ethereum was up 2.9% over the previous 24 hours of trading. Bitmine had been up as much as 11.9% earlier in trading.
Bitmine's valuation is rocketing higher today following an announcement that the company will be issuing $20 billion in new stock and using the proceeds to buy Ethereum. While the new stock sale will be heavily dilutive for current shareholders, investors are reacting positively to the big fundraising and crypto purchase news.
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Bitmine stock soars on $20 billion Ethereum purchase news
Bitmine has conditions in place to sell as much as $20 billion in additional stock and use the proceeds from the sale to increase its Ethereum holdings. The $20 billion in potential new share sales comes in addition to previous plans for stock sales and pushed the total value of the company's total potential share sales to $24.5 billion.
Bitmine stock has seen massive gains since Fundstrat's Tom Lee was announced as the chairman of the company's board of directors on June 30. Its share price is up roughly 1,360% since Lee was named leader of the board and the company announced a major Ethereum investment push.
What's next for Bitmine?
Tom Lee becoming chairman of Bitmine's board of directors immediately lent a huge amount of new credibility to the company and has helped attract investment capital that is allowing it to rapidly build its Ethereum treasury holdings. Lee has been one of the most prominent long-term bulls in the cryptocurrency space, and his name carries a lot of weight among investors.
As of a recent update from Lee, Bitmine now owns roughly 1% of the total circulating supply count of Ethereum tokens. The company is aiming to bring its total holdings up to roughly 5% of the circulating coin count. Bitmine is aiming to do with Ethereum what Strategy (formerly MicroStrategy) has done with Bitcoin, and having Lee heavily involved seemingly puts the company in good position to achieve its goals.
