🔵 $BMNR - @fundstrat has launched a $300M preferred share offering. Here's why the structure stands out compared to $STRC from @MicroStrategy: What are preferred shares? Preferred shares are a hybrid between debt and equity. Investors provide capital to a company and receive: ▫️ A fixed annual dividend (similar to a bond) ▫️ Potential upside if the company's stock appreciates $BMNR is offering a 9.5% annual dividend in exchange for $300M of capital. Why ETH staking changes the equation $BMNR currently holds ~5.4M ETH, representing roughly a $10B treasury at current prices. By staking that ETH, the company generates approximately 3% annual yield: ▫️ ~$300M/year in staking income Meanwhile, the preferred dividend obligation is: ▫️ 9.5% on $300M ▫️ ~$28.5M/year In other words, the dividend consumes less than 10% of estimated annual staking revenue. Stress-test scenario Assume ETH falls to $600 (roughly an 80% drawdown from current levels): ▫️ Estimated staking income: ~$100M/year ▫️ Preferred dividend obligation: ~$28.5M/year That still provides roughly 3.5x coverage on dividend payments. Even under a severe downside scenario, staking rewards alone could continue covering the preferred dividend. $BMNR vs $MSTR $MSTR built its strategy around raising capital to accumulate BTC, with much of that accumulation occurring at significantly higher prices. $BMNR is aggressively accumulating ETH after a 60%+ drawdown from cycle highs. Key differences: ▫️ Lower ETH cost basis potentially provides greater upside if ETH recovers ▫️ $STRC offered a 12% annual yield with no staking income offset ▫️ $BMNR offers 9.5% while generating 3%+ from ETH staking Effectively, staking helps reduce the economic cost of capital to roughly ~6% annually. The interesting part isn't just the dividend. It's that $BMNR is using a yield-bearing treasury asset to help finance the cost of raising capital — something BTC treasury companies cannot replicate through native network yield. 👀

BMNR is unlikely to default, but its stock has essentially been declared dead—even if ETH rises, it will issue more shares, diluting existing holders; those who bought BMNR stock are pure losers. Vitalik doesn’t need to work hard—this old man has had it too easy, enough to live comfortably for life; the project was handed directly to BMNR, and this round the Ethereum Foundation sold roughly $500 million worth of ETH, thrilled beyond measure, while only ETH holders suffered the most. 1. BMNR currently holds 5.41 million ETH, accounting for 4.49% of total supply. At an ETH price of $1,670, this represents an unrealized loss of nearly $10 billion. 2. For every $100 drop in ETH price, the unrealized loss increases by $540 million. 3. Cash on hand: $446 million (as of May 31); estimated total assets: ~$9.78 billion; company market cap: $9.7 billion; total liabilities: $300 million. The company’s market cap is only slightly higher than the market value of its ETH holdings. 4. Staking income: 4.71 million ETH staked, generating annualized income of ~$219 million at current prices; other revenue streams are virtually nonexistent. 5. Preferred stock dividends: $28.5 million/year; operating losses: ~$65 million/year. Staking income covers total fixed expenses by approximately 2.5x—this provides only a narrow safety margin; if ETH falls another 50% or more, staking income will no longer cover interest and operational costs. 6. Stock collapse risk: the company generates virtually no profit and relies entirely on ATM equity issuance to fund ETH purchases—large-scale dilution could occur at any time. 7. No repayment pressure until March 2027. 8. Probability of default is low—Ethereum staking income can cover interest expenses. BMNR’s business model is essentially: issue shares to buy ETH → stake ETH to earn yield → prove the strategy works → issue more shares. This is a cycle that requires continuous ETH price appreciation to sustain itself. The most likely form of collapse is not sudden death, but gradual dilution through repeated share issuances, slowly cooking away existing shareholders’ equity.

The $300 Million Preferred Stock Raise: To fight through the crypto winter and fund more ETH accumulation, Bitmine announced a proposed offering of 3 million shares of Series A Perpetual Preferred Stock. Trading under the expected ticker BMNP on the NYSE, these shares carry a fixed 9.50% annual dividend paid weekly in cash, testing Wall Street's appetite for high-yield, crypto-backed corporate equity.

[🚨 BitMine Strategy: Risky, But Potentially a Rational Choice] Re-reading @dubidubabap’s thoughts, I’m struck by how sharp and insightful many of the observations are. The structure of issuing perpetual preferred stock to attract new capital indeed creates a loop where “premiums can only be sustained if new money keeps flowing,” ultimately leaving common shareholders with the greatest risk—this is undeniably valid. In particular, concerns about increased dilution and burden during downturns are easily relatable to any investor. Nevertheless, when viewed holistically, BitMine’s approach appears to be intentional financial engineering, and with Tom Lee’s signature style layered in, the positive outcomes may well outweigh the side effects. There’s one key point I’d like to highlight: ✅ The argument that “9.5% is expensive compared to market rates, proving it’s risky” is flawed. The current U.S. 10-year Treasury yield is 4.49%. Yes, 9.5% is higher—but comparing them directly is misleading. Treasury bonds are risk-free assets guaranteed by the U.S. government; BMNR preferred shares are high-risk alternative assets backed by an ETH treasury. Comparing them as if they’re equivalent is like comparing apples to oranges. The correct comparison must be within the same structural category. MSTR’s STRC preferred shares began at 9% and have risen consecutively for seven months to reach 11.5% today. At 9.5%, BMNR is actually raising capital at a lower rate than other crypto treasury preferred structures. Considering high-yield bonds yield 7–9% and REIT dividends range from 5–8%, labeling 9.5% as “expensive” implicitly assumes this instrument should be as safe as a Treasury bond. But this product was designed from the outset as a risky asset—applying a risk-free benchmark to it misses the fundamental premise. Tom Lee, acting more like a seasoned Wall Street investor than a typical CEO, is deliberately pacing capital deployment—not flooding the market all at once. Recent data shows he’s intentionally slowed weekly buy rates. With approximately 5.2 million ETH held (about 4.31% of total supply) and over 3.33 million ETH currently staked, annual staking yield is estimated at up to $296 million at full scale. The dividend obligation from this $300 million maximum preferred offering (at 9.5%) amounts to roughly $28.5 million annually—meaning staking yield alone provides a safety cushion of over 10x coverage. (This reflects Tom Lee’s conservative, risk-averse management philosophy.) Of course, it’s true that common share price has dropped nearly 50% from its peak, with large unrealized losses accumulated. And it’s also critical to note that dividends are payable only at the discretion of the board. ✅ Comparing this structure to a traditional manufacturing company is misleading. BitMine isn’t a company that sells products for revenue—it’s a treasury vehicle with ETH as its core asset. Just as REITs distribute dividends from rental income, staking yield constitutes BitMine’s core operating cash flow. Criticism that “there’s no stable operating cash flow” misunderstands the business model entirely—it’s applying the wrong metric. Preferred shareholders receive a stable 9.5% yield; common shareholders bet on ETH price appreciation, NAV premium, and leverage—roles are clearly delineated. As MSTR has demonstrated with BTC, this leveraged treasury strategy can act as a powerful flywheel in bull markets. If Tom Lee truly believes—as he has stated—that “ETH is the money of the future,” and is taking a long-term view, then this preferred issuance isn’t mere dilution—it could function as an accelerator to maximize upside. ✅ In short: While @dubidubabap rightly points out that short-term risks cannot be ignored, if you believe in ETH’s long-term bull case, BitMine represents a rational and aggressive strategy under Tom Lee’s prudent management. (And let’s not forget: ETH prices have already corrected significantly.) This company isn’t best described as “a bank opened”—it’s better framed as an “ETH leveraged treasury machine.” Investing ultimately depends on your own conviction and risk tolerance. If you prefer direct ETH exposure, buy ETH. If you want leveraged exposure, consider BMNR common shares. If you seek stable yield, BMNP preferred shares are a viable option. I must emphasize: This is not investment advice. Thank you for the excellent post. $BMNR

Bitmine offers a 9.5% dividend, paid weekly, despite holding nearly $9 billion in unrealized losses on its ETH holdings. A 9.5% annual dividend, paid in cash to investors every week—this figure is so attractive it raises suspicion, given that the company filing for this offering is sitting on nearly $9 billion in accounting losses, roughly equivalent to 300 billion baht. The company in question is Bitmine, founded by Tom Lee, currently the world’s largest holder of Ethereum (ETH). On Wednesday, June 3, Bitmine filed documents with the U.S. SEC seeking to raise $300 million through the sale of preferred shares—shares entitled to priority dividend payments—under the ticker BMNP. The question is: Why pay such a high yield, and why now? 🔹 July 2025 Strategy: The Original Formula Looking back a year, Strategy, led by Michael Saylor, launched its high-yield preferred shares, STRC, to aggressively buy Bitcoin. It debuted at 9% in July 2025 and climbed steadily for seven consecutive months to reach 11.5%. Investors flocked to it, drawn by the steady income stream combined with indirect exposure to Bitcoin—until the total outstanding value ballooned to around $10 billion. This is precisely the model Bitmine is now copying, simply swapping Bitcoin for Ethereum. 🔹 June 1, 2026: Still Buying ETH, Even While Deep in the Red Just days before filing its prospectus, Bitmine purchased nearly 30,000 additional ETH, pushing its total holdings past 5.4 million ETH—roughly 4.5% of all ETH in circulation. Yet the value of these holdings carries massive unrealized losses: with ETH trading at $1,774—32% lower than the same period last year—its balance sheet is deeply underwater. Meanwhile, Bitmine’s common stock has dropped nearly 50% over the past six months. 🔹 June 3, 2026: The BMNP Deal Is Launched Bitmine is offering 3 million shares at $100 per share, with a fixed annual dividend of 9.5%, paid weekly in cash. The shares are set to trade on the NYSE under the ticker BMNP, with Moelis and Cantor as lead managers. Trading is expected to begin within 30 days of issuance. 🔹 Hidden Mechanics in the Contract The critical detail: if Bitmine misses a dividend payment, the unpaid amount accrues compound interest starting at 9.55%, increasing slightly each week until it caps at 15%. In simple terms: the longer it delays payment, the higher its cost becomes—a noose tightening around its own neck, forcing it to generate cash continuously to meet obligations. 🔹 The Timing of This Deal Is What’s Truly Alarming This is the heart of the matter: Strategy’s original STRC model is now under serious scrutiny. Last week, Strategy sold Bitcoin for the first time since 2022—just to fund its dividend payouts—and Bitcoin’s price has slipped to around $65,000. Meanwhile, STRC’s market price has fallen below par to $98. Bitmine is choosing to replicate this model precisely at the moment investors are beginning to doubt whether it still works.. The question buyers must ask themselves is: what they are buying is not a deposit guaranteed to return principal, but a bet on Ethereum wrapped in a glossy return package. This type of stock never matures. To get your principal back, there are only two options: the company buys it back, or you sell it to someone else. The moment people stop wanting to hold it, the price can easily collapse. . In a bull market, everything fits perfectly—coins rise, dividends flow easily, and people rush to buy. But when the market turns, all the pieces snap tight at once. This is exactly what is happening with Strategy, and what Bitmine is now following. . Social media sentiment is sharply divided. Here is a summary of the overall sentiment trend, not direct quotes. . The skeptical side sees this model as smelling like Terra Luna, which collapsed due to unrealistically high returns. Some call it outright a Ponzi scheme, arguing that in the end, new investors’ money must fund payouts to earlier ones. They also point out that roughly 80% of those rushing to buy such shares are retail investors who likely don’t fully understand the risks involved. . The believers counter that this differs from Terra because it is backed by real tokens, not air. The board controls dividend payouts directly. The fact that capital markets still allow such companies to raise funds indicates institutional confidence in the long term. Many view this as mere leverage-induced friction—not a catastrophe. . For now, all of this remains only a proposed plan pending approval from the SEC and NYSE before trading can begin in 30 days. This case is far from over—stay tuned. . Regardless of your perspective, is this deal a lifeline for Ethereum’s treasury—or merely a temporary breath of air for a model already showing cracks? Comment and discuss. . ⚠️ This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks carry high risk. Please conduct thorough research before making any decisions. . #BitMine #Ethereum #ETH #TomLee #BMNP

LATEST: ⚡ BitMine has filed to offer 3 million shares of 9.5% perpetual preferred stock.