Shares of Ethereum-focused treasury firm ETHZilla (ETHZ) dropped over 5% on Wednesday after the company reveal a 1-for-10 reverse stock split, a move designed to appeal to institutional investors and strengthen long-term growth prospects.
The Palm Beach, Florida-based company confirmed that the reverse split will take effect at the market open on October 20, consolidating every 10 outstanding shares into one new share.
“As part of ETHZilla’s effort to expand engagement with institutional investors, the reverse split is designed to provide these investors with access to collateral and margin availability associated with stock prices greater than $10,” the firm wrote on X (formerly Twitter).
The company explained that the change aligns its stock structure with institutional investment standards, enabling broader participation from funds and capital partners who typically avoid low-priced shares.
Once the split is completed, ETHZilla’s total outstanding shares will drop from about 160 million to roughly 16 million, according to the company’s filing. Management also pointed to mutual fund minimum share price requirements as a driving factor behind the decision.
ETHZilla’s Ethereum Strategy and Market Reaction
Formerly known as 180 Life Sciences, ETHZilla rebranded in late July after adopting an Ethereum-focused treasury model, aiming to position itself as one of the largest publicly listed holders of ETH. The firm raised $425 million through a PIPE offering to fund this strategy.
Initially, ETHZilla’s pivot to Ethereum sparked a surge in investor enthusiasm. Its shares briefly traded above $10 following the news that Peter Thiel and related entities had acquired a 7.5% equity stake in the company.
However, the rally was short-lived. Within weeks, ETHZ shares pulled back sharply, prompting the company to execute a $250 million share buyback program to stabilize prices.
At the close of trading on Wednesday, ETHZ shares stood at $1.83, marking a 4.9% daily decline. Despite the drop, the stock remains up over 105% in the last six months, reflecting lingering investor optimism about the company’s Ethereum holdings and future strategy.
ETHZilla’s Ethereum Holdings and Broader Vision
ETHZilla currently holds 102,246 ETH, worth approximately $407 million at current market prices — making it the sixth-largest publicly traded Ethereum treasury.
Company executives emphasized that the reverse split does not affect ETHZilla’s core accumulation plans.
“The stock split has no impact on our ETH accumulation strategy,” said John Kristoff, ETHZilla’s SVP of Corporate Communications and Investor Relations. “ETH accumulation is only one part of our broader business model — we are not a traditional digital asset trust.”
Kristoff added that ETHZilla is working on expanding its DeFi and blockchain service offerings, including tokenization solutions, DeFi protocol integration, blockchain analytics, and traditional-to-digital asset conversion gateways.
“We’ll continue updating the market on our progress in the coming weeks and months,” Kristoff noted.
Outlook
While the reverse stock split reflects a strategic effort to attract institutional capital, ETHZilla’s stock performance remains tied to both Ethereum’s market dynamics and investor confidence in its evolving DeFi business model.
If ETH prices continue to stabilize and institutional adoption grows, ETHZilla could find itself well-positioned to become a key player at the intersection of blockchain finance and traditional equity markets.
Post Views: 45
