BitMine Immersion Technologies has seen significant fluctuations in its stock prices after its operations drew criticism from Kerrisdale Capital, a prominent short seller. Initially, shares decreased by over 5% during early trading before eventually closing with a slight gain of 1.35% at $60.

Kerrisdale issued a report on Wednesday, arguing that BitMine, which focuses on acquiring Ether, is following a path leading to extinction. They pointed out that the company’s strategy of issuing stocks to fund its Ether acquisitions has become ineffective as the company needs to raise cash through stock sales at a premium.

BitMine’s approach has made them the largest public holder of Ether, possessing approximately 2.83 million ETH valued over $12.5 billion. However, Kerrisdale estimates that BitMine holds 9 Ether per 1,000 shares.

While investors were initially excited, Kerrisdale remarked that the rapid pace of stock offerings has eroded this enthusiasm, stating:

“The sheer velocity of BMNR’s stock issuance has turned early enthusiasm into fatigue, with investors conditioned to believe every rally will be met by more supply.”

Furthermore, the report criticizes BitMine’s Executive Chair, Tom Lee, suggesting that while he has name recognition, he lacks the follower base that would sustain investor interest akin to that of Michael Saylor.

Kerrisdale expressed skepticism about BitMine’s overall strategy and urged investors to reconsider directly holding Ether rather than investing in BitMine stocks.