Tom Lee, chairman of Ethereum reserve provider BitMine, has asked shareholders to approve a motion to significantly increase the company's total share capital from 500 million to 50 billion shares. This move is intended to make room for capital activities (such as issuing new shares) and to prepare for a potential stock split if the share price rises in the future. Lee has again raised his price target for Ethereum to $22,000 to $250,000, and expects BMNR's implied share price to potentially climb to between $500 and $5,000 per share.
The core motivation for the substantial expansion of authorized shares
BitMine has proposed a significant increase in the number of authorized shares from the current 500 million to 50 billion. Chairman Tom Lee pointed out that this move is not an immediate issuance of new shares, but rather a way to reserve space for future capital activities. The primary uses include at-the-market offerings, convertible debt instruments, or preferred stock financing. Furthermore, increasing the number of shares also provides the company with the necessary financial leverage for opportunistic acquisitions in the market, ensuring the expansion flexibility needed to compete in the rapidly growing digital asset sector.
BMNR's stock price is correlated with ETH.
According to Tom Lee's analytical model, BitMine's stock price exhibits a high positive correlation with Ethereum (ETH), with a correlation coefficient of approximately 0.15 times the ETH price plus earnings per share growth. The company firmly believes that ETH is the core of future financial infrastructure, and its price potential is closely related to its adoption rate by Wall Street institutions. If ETH rises to $22,000 to $250,000 as expected along with Bitcoin, BitMine's implied stock price could climb to between $500 and $5,000 per share, a key assumption driving its capital restructuring.
Stock splits and market liquidity management
To maintain stock liquidity, BitMine believes that keeping BMNR's share price around $25 per share is ideal. If a surge in Ethereum leads to a sharp rise in the share price, the company will need to conduct a large-scale stock split (such as 20:1, 60:1, or even 100:1). Tom Lee explained that a 100:1 split would increase the number of outstanding shares to 42.6 billion, therefore the authorized number of shares must first be increased to 50 billion to legally accommodate the massive number of shares resulting from the split.
BMNR surged nearly 15%
The market seemed to welcome what Tom Lee called a "dramatic" stock surge, with BitMine shares rising nearly 15% on Friday to close at $31.19.
This article, "Tom Lee's 100-fold Increase in Authorized Shares: The Rationale Behind BitMine's 15% Stock Price Surge," first appeared on ABMedia, a ABMedia .
