Short-seller Kerrisdale Capital has taken a position against BitMine Immersion (BMNR), the ether-focused digital asset treasury firm led by Fundstrat co-founder Thomas Lee, describing its business model as outdated and overly reliant on premiums.

In a detailed report released Wednesday, Kerrisdale said BitMine’s approach mirrors that of Strategy (MSTR)—raising capital through share issuance to purchase crypto and grow token-per-share metrics—but argued that the market environment no longer supports such a strategy.

“BMNR is pursuing a model that is on its way to extinction,” the firm wrote. “Scarcity and meme-like enthusiasm once sustained premiums despite continual dilution, but those conditions have disappeared.”

Kerrisdale previously shorted Strategy while holding a long position in bitcoin, citing concerns over its unsustainable premium to net asset value, a trade that has proved profitable so far.

BitMine’s Rapid Expansion and Stock Surge

Over the past year, Las Vegas-based BitMine shifted from a niche bitcoin miner into a corporate treasury focused on ether. Under Lee’s leadership as executive chairman, the company has raised over $10 billion since July 2025—mostly through at-the-market (ATM) stock sales—and amassed more than 2.8 million ETH.

Shares soared from roughly $5 to over $100 after the ether treasury strategy launch, but have since fallen back to around $58 in recent trading. Kerrisdale criticized the pace of issuance—about $170 million per day—as turning early investor enthusiasm into fatigue. The report also described BitMine’s $365 million recent equity raise, marketed as a premium deal, as effectively a “discounted giveaway” once warrants are considered.

Concerns Over Leadership and Transparency

Kerrisdale took aim at Thomas Lee’s influence, suggesting his profile lacks the pull of figures like Michael Saylor. “Tom Lee brings recognition as a strategist and television commentator, but he does not command the cult-like following that made Saylor a meme-stock icon,” the report said.

The firm further highlighted increasing opacity in BitMine’s disclosures. ETH-per-share growth has slowed even as total holdings rose, with the company’s market premium falling from 2.0x in August to approximately 1.2x in October.

Rising Competition

Adding pressure, more than 150 U.S.-listed firms reportedly plan $100 billion in crypto treasury offerings, while upcoming Ethereum ETFs promise more transparent, lower-cost exposure. Kerrisdale concluded that BitMine’s combination of generic strategy, growing competition, and slowing ETH-per-share growth makes its premium likely to decline.

“BMNR’s strategy is generic, disclosures have grown opaque, and ETH-per-share growth has stalled,” Kerrisdale wrote. “Its market premium is destined to sink.”

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