BMNR extreme value deduction 12.16

In the latter half of last week, the sharp decline in AI stocks after earnings reports dragged down U.S. stocks and also interrupted the rebound trend of Crypto. Over the past three days, ETH dropped from 3.3k to 2.9k, and BMNR also gave up its previous gains, falling back to 30+. However, my recent focus has been on the shareholder meeting resolution document released by BMNR. The shareholder meeting will be held in mid-January, and there are two noteworthy proposals in the resolution:
- Proposal 2: Apply to increase the ATM financing share capital limit from the current 500 million shares to 50 billion shares.

- Proposal 4: The incentive policy for Tom Lee, which includes tiered incentives across three dimensions: operations, stock price, and market capitalization.

First, let’s talk about point 1. Currently, BMNR’s ATM financing limit is 500 million shares, which was approved at the company’s meeting in July. After nearly five months of operation, BMNR has already used 425 million shares, leaving little remaining quota. Applying for an adjustment at the shareholder meeting was expected. What was unexpected, however, was the 100-fold increase from 500 million shares to 50 billion shares. Is this really necessary?

A simple calculation shows that the current 5% ETH accumulation target of 6 million ETH is still short by 2 million. Previously, 425 million shares were used to achieve 4 million ETH accumulation. Even if another 400 million shares are used to achieve the remaining 2 million target, this demand is far less than the 50 billion share limit. Such a high dilution quota has clearly raised concerns in the market, and BMNR has seen a significant drop over the past three days.

I suspect BMNR’s management is hoping to resolve the ATM financing quota issue in one go at the shareholder meeting. That’s fine, but I will track two metrics going forward: 1. Only use ATM when mNAV > 1; 2. ATM financing does not exceed 5% of the day’s trading volume.

If these two principles can be maintained, ATM financing is healthy. If they are broken, I will reassess the management’s operational capabilities.

Point 2 is the special incentives for Tom Lee, with two unlock tiers across three dimensions. The 5% ETH accumulation unlock is relatively easy to achieve, but the stock price of 250 and market cap of 50 billion will be more challenging. This incentive policy also aligns Tom Lee’s interests with the company’s long-term success, which is worthwhile.

Next, I will continue to perform extreme value projections by tracking mNAV, with the next ETH accumulation update due on 12.22.

Core assumptions: On Monday, BMNR updated its ETH accumulation progress to 3.96 million, with an increase of 100,000 last week, while keeping a high cash position of 1 billion. mNAV climbed to 1.2+ before falling back to 1.07. Last week, BMNR’s ETH accumulation was not too aggressive, and no cash was used to buy ETH, likely to hedge against potential volatility. Now, with ETH dropping to 2.9k this week, that 1 billion in cash will come into play. Regarding the 50 billion share ATM limit mentioned earlier, opinions on Reddit and X are highly divided, with mostly negative views, which could lead to potential selling pressure. I don’t mind the differing opinions—everyone can interpret things their own way. I will continue to track the data to observe the management’s actual actions. For now, BMNR still maintains a restrained ATM pace, which is healthy.

Conclusion: If ETH rebounds to 3.3k, mNAV will recover to 1.2, corresponding to a stock price of 39. If ETH falls to 2.75k, mNAV will drop below 1, corresponding to a stock price of 27. The extreme range is therefore 27–39.

Not investment advice.