Bitmine has fueled expectations of a possible stock rally after Chairman Tom Lee highlighted the company’s chances of joining the Russell 1000 index ahead of the benchmark’s latest reset update.
Summary
- Tom Lee said Bitmine could join the Russell 1000, potentially attracting new institutional buying demand.
- Bitmine holds 4.72 million ETH worth about $8.1 billion, making it the largest Ethereum company.
- The company expects about $219 million in annual awards to help support BMNP’s dividends.
According to Tom Lee, an updated list of companies entering and exiting the Russell 1000 is scheduled to be released on June 18, with Bitmine Immersion Technologies likely to be eligible for inclusion.
Lee argued that membership could increase demand for the stock because many institutional funds and asset managers are required to allocate money only to companies included in major indexes.
The comments come as Bitmine continues to expand its position as one of the largest owners of Ethereum. As crypto.news previously reported, the company recently disclosed its holdings of 4,718,677 ETH, with an estimated value of $8.1 billion based on the ETH price of $1,718. Bitmine said this position makes it the largest Ethereum treasury company in the world and the second largest crypto treasury behind Strategy.
The Russell 1000 coverage can attract institutional demand
Speaking about Russell’s upcoming relaunch, Lee said the inclusion of the index could open the door to more purchases from funds that track or compare to the Russell 1000. According to Lee, those investment mandates could create a new source of demand for BMNR shares if the company is added to the index.
Investors have been closely watching Bitmine’s stock performance in recent times as the company has been rolling out new financial vehicles tied to its Ethereum acquisition strategy.
BMNR shares remain volatile but continue to hold above the closely watched support area near $16. Yahoo Finance data showed the stock trading at around $16.54 on June 17, up about 2% in the session after moving between $16.03 and $16.70.
Shares had previously closed at $16.21 after reaching an intraday high of $17.26 following the launch of Bitmine’s preferred stock.
At the same time, Bitmine’s newly listed BMNP preferred stock began trading on the New York Stock Exchange on June 16. The security, which was formally known as 9.50% Series A Perpetual Preferred Stock, was issued after the company sold 3.5 million shares at $80 each on June 10, generating approximately $273.8 million after net expenses.
Ethereum staking supports the preferred stock strategy
Bitmine has tied the preferred stock directly to its Ethereum treasury operations. According to the company’s disclosure, the proceeds from the offering will support the purchase of more ETH, while the large rewards generated by the company’s assets are expected to help cover dividend payments.
Lee said annual awards of approximately $219 million provide recurring cash flow to support dividends related to preferred stock. The preferred stock has a dividend yield of 9.50%, with payments distributed weekly.
Trading data from the NYSE showed BMNP rising above its initial offering price after listing. Preferred shares changed hands near $89 at press time after fluctuating between $88 and $92 during early trading, while exchange data showed the security previously reached $88 following the initial offering.
By combining Ethereum’s growing treasury, income generated by staking, and a popular new stock structure, Bitmine has positioned itself as one of the most watched crypto-linked stocks ahead of the Russell 1000 update that Lee believes could be the company’s next big mover.
