BitMine Immersion Chairman Urges Shareholders to Approve 50 Billion Share Authorization

TLDR: 

• BitMine seeks to increase authorized shares from 500 million to 50 billion by January 14 vote.
• Tom Lee states the increase won’t dilute shareholders but prepares for future stock splits.
• BitMine share price projections of $500 to $5,000 would require stock splits of 20-to-1 to 100-to-1.
• The authorization enables capital raising, acquisitions, and convertible instrument issuance.
  

BitMine Immersion chairman Tom Lee has called on shareholders to approve a proposal increasing authorized shares from 500 million to 50 billion. 

The Ethereum treasury firm must receive votes before the January 14 deadline, with the annual meeting set for January 15 in Las Vegas. Lee emphasized the increase aims to facilitate future stock splits, acquisitions, and capital raising activities rather than dilute existing shareholder value.

Share Authorization Proposal Details

The proposal seeks to expand authorized shares by a factor of 100, moving from the current 500 million ceiling. 

In his start-of-the-year message, Lee addressed shareholder concerns directly. He clarified that this authorization does not mean the company will issue all 50 billion shares immediately.

“It doesn’t mean we’re issuing 50 billion shares. That’s what we want the total max shares to be,” Lee said. The increase establishes a maximum limit to provide operational flexibility for various corporate activities.

The chairman emphasized that the proposal is not a precursor to shareholder dilution. Lee stated the authorization serves multiple strategic purposes beyond simple share issuance. 

These include facilitating at-the-money transactions, issuing convertible instruments, creating warrants, and establishing preferred stock classes when opportunities arise.

Additionally, the increased authorization would enable the company to pursue opportunistic acquisitions more efficiently. This flexibility could prove valuable as the crypto mining sector continues evolving. 

The board believes this structural change positions the company to respond quickly to market opportunities.

Lee urged shareholders to vote yes on the proposal before the January 14 deadline. The annual meeting takes place the following day at the company’s Las Vegas location. Management expects the proposal to pass given the strategic rationale provided to investors.

Stock Price Projections and Split Requirements

Lee explained that BitMine’s stock price correlates closely with Ethereum’s market value. He presented an equation demonstrating this relationship, suggesting the company’s share price moves in tandem with ETH. This correlation forms the basis for understanding why expanded authorization becomes necessary.

According to Lee’s projections, if Ethereum reaches $22,000, BitMine shares could trade at $500. Similarly, an ETH price of $62,000 would correspond to $1,500 per share. 

In the most bullish scenario, Ethereum hitting $250,000 would push BitMine stock to $5,000 per share.

However, Lee noted that most investors prefer shares priced around $25 for accessibility and trading convenience. 

To maintain this preferred price level at various Ethereum valuations, the company would need to implement stock splits. At the projected price points, splits of 20-to-1, 60-to-1, or 100-to-1 would be required.

With 426 million shares currently outstanding, these split scenarios would create 8.5 billion, 26 billion, or 43 billion shares respectively. 

Therefore, the 50 billion authorization provides adequate headroom for even the most aggressive split scenario. This forward-thinking approach ensures the company can execute splits without requiring additional shareholder approval.

The post BitMine Immersion Chairman Urges Shareholders to Approve 50 Billion Share Authorization appeared first on Blockonomi.