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ETHZilla Corp (NASDAQ:ETHZ) shares are surging in Monday’s after-hours session after the company announced a strategic move to repurchase its common stock.
What To Know: ETHZilla announced that it sold approximately $40 million of its ETH, the native crypto of the Ethereum (CRYPTO: ETH) blockchain, to fund share repurchases.
The company said it executed the ETH sale on Oct. 24 and has since repurchased approximately 600,000 shares of its common stock under its existing $250 million buyback authorization.
“We are leveraging the strength of our balance sheet, including reducing our ETH holdings, to execute share repurchases. We expect these repurchases to be immediately accretive, using cash raised through the sale of our ETH, while our common shares trade at a significant discount to NAV,” said McAndrew Rudisill, chairman and CEO of ETHZilla.
“By opportunistically repurchasing shares while our stock is trading below NAV, we plan to reduce the number of shares that are available for stock loan/borrow activity, while increasing the NAV per share of the Company.”
ETHZilla said it plans to use the remaining proceeds from its ETH sale for additional share repurchases. The company had approximately $400 million of ETH on its balance sheet as of Monday.
ETHZ Price Action: ETHZilla shares were up 10.65% in after-hours Monday, trading at $22.85 at publication time, according to Benzinga Pro. The stock traded between $22.87 and $19.57 on Monday on above-average volume.
ETHZilla stock is about 42.7% above its 52-week low. However, the RSI is sitting at 30.7, indicating weak momentum.
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