In today’s market, flooded with DAT companies, ETHZilla stands out as a prime case study for analyzing how different financing routes can impact share prices. From PIPE private placements to convertible note issuances, a 7.5% stake investment from Peter Thiel, stock buybacks, and EtherFi staking, ETHZilla has employed a variety of strategies. Since July 2025, ETHZilla’s stock price surged by 174%, far outpacing Ethereum’s 80% gain, showcasing a clear leverage effect. However, only some of these financing strategies successfully boosted the stock price. Post the hype surrounding Peter Thiel’s investment through Founders Fund, ETHZilla experienced profit-taking and subsequent underperformance, particularly in the latter half of August, where its price trend significantly lagged behind ETH. This report analyzes ETHZilla’s stock price movements in relation to its financing milestones to shed light on the growth and strategic direction of DAT companies.

Financing Milestones

From a linear progression perspective, ETHZilla’s stock price action reveals early signs of front-running before its official announcement of an Ethereum DAT strategy on July 29th, 2025. While no significant news or SEC filings were released, the price showed a strong and positive growth pattern and the overall market cap has been hiking from $5mn to $28mn in a month. Ironically, after the company formally rebranded from 180 Life Sciences to ETHZilla and completed its $425m PIPE financing, the stock saw little volatility — an instance of “sell the news,” where positive developments fail to lift prices after they materialize.

Following the $425m PIPE, ETHZilla continued to leverage following financing tools:

• August 11: Announced the completion of $156mn in convertible notes financing.
• August 13: Disclosed Peter Thiel’s 7.5% stake acquisition, resulting in a strong celebrity signalling effect.
• August 22: Revealed shareholders’ plan to convert and sell 75m shares from the convertible notes.
• August 25: Announced a $250mn share buyback program.
• September 2: Disclosed plans to deploy $100mn of ETH to EtherFi for staking.
• September 8: Announced $80mn financing from DRW Cumberland through ETH collateral for buybacks, with 2.2m shares already repurchased at $2.50 per share.

The details of these financing activities, including financing cost, fundraising amount and key terms are as listed below:

After the August 11th convertible notes disclosure and Peter Thiel’s 7.5% stake announcement on August 13th, ETHZilla stock entered a powerful rally. Benefiting from celebrity signaling, the stock posted double-digit gains over the following sessions, creating a flywheel effect with ETH price gains that further amplified upward momentum.

ETHZilla’s most significant price surges occurred in pre-market and after-hours trading, which could hint on measured institutional participation compared to retail investors. For example, after August 13, ETHZilla opened at $14.34, hit an intraday high of $17.46, and closed at $10.70. These divergences between pre-market spikes and intraday action repeatedly highlighted the stock’s volatility and susceptibility to speculative trades.

After August 13th, ETHZilla faced a downturn, weighed down by weaker-than-expected PPI data and a broader declines in major crypto assets like ETH and BTC. On August 22nd, the announcement of plans to sell 75m shares triggered a 30% decline, nearly halving ETHZilla’s price from its peak.

Despite announcing a 250m share buyback program on August 25th and the $100mn EtherFi staking plan on September 2nd, ETHZilla’s performance remained weak. Even as ETH reclaimed $4,600, the stock continued its downtrend, reflecting broader market concerns and weak sentiment. On September 8, ETHZilla announced $80m in financing from DRW Cumberland using ETH collateral for buybacks, with 2.2m shares repurchased at $2.50 per share. Pre-market trading saw the stock rise 10%, but gains moderated during regular trading. Given PIPE investors’ entry price of $2.65 per share, ETHZilla seems highly motivated to maintain its stock price above this level, leveraging market sentiment to fuel further appreciation.

Lessons Learnt from ETHZilla’s Financing

ETHZilla’s financing strategies have had varying impacts on the company’s market valuation. Based on stock price changes within 1 and 3 trading days after the release of SEC announcements, combined with an analysis of mNAV, we can compare the effects of different financing strategies:

It is evident that ETHZilla pursued an aggressive strategy in acquiring ETH, leveraging two rounds of financing to rapidly acquire a significant amount of ETH, thereby quickly increasing the value of its crypto asset holdings. On the other hand, the company’s stock price was still significantly influenced by Peter Thiel’s investment and shareholders’ sale of convertible note shares, causing short-term volatility. After the August 25 announcement of the share buyback plan, the company also significantly increased its activity on social media, with a notable rise in posts on X, creating more public attention and media engagement.

Currently, the price of ETH held by ETHZilla remains discounted compared to market value. Additionally, ETHZilla’s mNAV has fallen below 1x, and the current stock price is below the entry price for institutional investors in the PIPE financing. Greater efforts are expected from the company in the future to generate a more positive impact on its stock price.

Key Takeaways for DAT Companies

For sustainable growth, DAT companies need a solid market cap foundation and robust cash flow — not just “smash-and-go” investors chasing short-term hype. Securing long-term institutional backing and aiming for inclusion in large passive funds or indices could create a flywheel effect, driving sustained price appreciation and delivering long-term value to shareholders. Strategy could be a good recent example as it has qualified for entering the S&P 500 index, after which the capital inflow could further lift the stock performance. ETH DAT companies like ETHZilla still have a long way to go, both in terms of market cap and digital asset reserve level, and with more crypto-focused companies enter the major indices, a better institutional adoption will bring an even bigger market for all stakeholders.

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