• ETHZilla said it has sold 24,291 ETH to pay off outstanding debts.
• The company also suggested it will transition from an ETH treasury model toward a tokenized RWA business.
• Community members blasted the move following the significant underperformance of its mNAV over the past few months.

Peter Thiel-backed ETHZilla (ETHZ) announced it sold 24,291 ETH for ~$74.5 million to redeem outstanding senior secured convertible notes.

"We plan to use all, or a significant portion, of the proceeds to fund the redemption," ETHZilla noted in a Monday X post.

Following the sale, ETHZilla reported a balance of 69,802 ETH, a market cap-to-net assets value (mNAV) ratio of 0.70, and NAV/share of $12.54.

The firm also suggested it will transition away from an ETH digital asset treasury (DAT) model toward a tokenization-focused business after it removed the mNAV dashboard from its website.

Prior to today's announcement, ETHZilla had acquired minority stakes in several tokenization startups, including Zippy, Karus and Satschel.

"In the future, the Company believes its value will be driven by revenue and cash flow growth from our RWA tokenization business," ETHZilla wrote.

However, the move has sparked heavy backlash with community members blasting ETHZilla's management.

"[...]Renaming a company ETHzilla, to ostensibly capture the retail hype, then exiting the model all in 5 months feels like max extraction," an X user wrote.

Another user with the handle @capybaraReborn commented: "Such a lack of accountability. 2/3 of NAV destroyed through unforced errors in 3 months."

The mNAV provides insight into how a company's net assets compare to its market capitalization. Values below 1 show that a company's stock is underperforming its net assets.

ETHZilla's stock rise and subsequent crash

ETHZilla launched a $425 million PIPE offering in July to establish an Ethereum digital asset treasury (DAT), following its rebrand from 180 Life Sciences. The company's stock skyrocketed over $100 in August after an investment from Peter Thiel's Founders Fund. It went on to acquire 102,000 ETH in the same month.

However, shares have since crashed by over 90% following a downturn across the crypto market. During the same period, ETH's price declined by about 35%, indicating that ETHZilla's market cap significantly underperformed its net assets. The declining share price and piling debt obligations reduced its ability to raise cash for more ETH purchases.

In an attempt to close the mNAV gap, ETHZilla sold $40 million worth of ETH in October to kick off a share buyback program. While the news temporarily lifted its price, shares plummeted again in the following weeks.

ETHZ is trading at $6.3 on Monday, down 7% at the time of publication.

In contrast to ETHZilla, BitMine has continued to accumulate ETH over the past months, growing its holdings to 4.06 million ETH, according to a report on Monday.