Ethereum treasury firm ETHZilla to execute 1-for-10 reverse stock split to help boost price of ETHZ shares

Ethereum treasury firm ETHZilla Corporation (ticker ETHZ) has announced a 1-for-10 reverse stock split to reduce the number of outstanding ETHZ shares. The split is expected to become effective on Oct. 20.

The move also aims to boost the price of Nasdaq-listed ETHZ above $10 to appeal to large mutual funds with "minimum stock price threshold limitations." ETHZ is down over 7% on the day to trade around $1.77.

"As part of ETHZilla's effort to significantly expand its engagement with the institutional investor community, the Reverse Stock Split is intended to provide these investors and large financial institutions with access to collateral and margin availability associated with stock prices greater than $10.00," the company said in an announcement on Wednesday, noting the split is not not connected to exchange listing requirements.

The split was approved by the ETHZilla’s stockholders at a Special Meeting of Stockholders on July 24. The firm, originally 180 Life Sciences Corp., officially rebranded to ETHZilla in August after receiving backing from Peter Thiel’s Founders Fund.

ETHZilla has previously engaged in operations to boost its stock price, including a $250 million stock buyback program. The firm, which holds over 100,000 ETH, has also deployed some of its crypto holdings into DeFi applications like liquid restaking protocols EtherFi and Puffer.

Over 60 institutional and crypto-native investors participated in ETHZilla's PIPE transaction, including Borderless Capital, GSR, and Polychain Capital, as well as notable angel investors like Eigenlayer’s Sreeram Kannan, Gauntlet’s Tarun Chitra, and Superstate’s Robert Leshner.