Why Wall Street Won’t Pay $1 for this Stock Despite Its $439 Million in Ethereum
Bit Digital returned to profit in the third quarter with $28.5 million earnings, yet its stock closed at $0.79 despite holding $439 million in Ethereum.
Across roughly 360 million shares, each represents about $1.22 of Ethereum alone. The stock slipped another 6% before Thursday's open, despite the company's profitable third quarter. Revenue fell 11% to $27.1 million, with crypto value swings contributing $16.3 million of profit.
Asset Valuation Discrepancy
Bit Digital also owns 59.7% of WhiteFiber, a Nasdaq-listed AI data center firm valued at $487 million on Sept. 30. However, WhiteFiber has since traded near $10, down from $18.01 at quarter end. The ETH holdings aren't entirely liquid either, as the company has pledged 64,000 LsETH as loan collateral.
The persistent discount to our net asset value makes repurchases an option that deserves serious consideration, but the benefit to shareholders depends on both the price we pay and how we fund them.
Nasdaq Listing Concerns
The stock first closed under $1 on Oct. 16, triggering Nasdaq warnings after 30 consecutive business days below $1. The company has 180 days to recover its stock price. Bit Digital previously received this notice in January 2023 and resolved it within three weeks. The company owes $150 million in convertible notes and has not announced plans for a buyback vote.
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