Bitmine Offers 9.5% Dividend Preferred Stock is this a Bailout or Opportunity?

[fullfitlarry]

https://x.com/Cointelegraph/status/2062293298136469598

Bitmine is no longer just a company that makes Bitcoin miner, and again as they followed Saylor, they have ETH in their balance sheet and one of the biggest holders of ETH. But the only difference with Saylor is that most of their acquisitions is when ETH is as it's peak, while Saylor is "buying" when it was not that big that's why he has a lot of leg room to work although recently as per their SEC filing, they have sold some Bitcoin already.

Bitmine though is offering a very interesting package of 9.5% yield, that is some offer that most investors can't refuse. But it's only good if the company could generate income, as the market is on the bearish trend and there could be no significant profits from mining hardware. Maybe they can cover it, but still the dividend is at risk.

So the offer is basically a classic high-risk, high-yield scenario.

The question is, and with regards to the current market sentiments, is the timing bad?
Are you willing to take that risk on Bitmine and hope for the best in the future?
Or it is a no go for most of us here and just first observe it from the distance?

[TastyChillySauce00]

STRC, preferred stock by Strategy is currently under the water because BTC is going down even with higher yield.
I don't know if Bitmine offering yet another preferred stock will even work, I don't think doing this is sustaining at all.

[Alpen]

To service the issued shares with guaranteed dividend yields, Michael Saylor actually had to sell Bitcoin from his holdings at a loss. This looks a lot like a Ponzi scheme. My question to Bitmine is: where exactly do they plan to generate the profits to cover the dividends on their own shares?

[FinneysTrueVision]

Strive was the first treasury company to copy Strategy, by offering a dividend paying preferred stock. Now Bitmine is following along because continuing to dilute shareholders of their common stock is no longer working. 9.5% is the starting annual yield and if they are anything like STRC and SATA, they will have to keep raising it to stay at their target price.

Regardless of how they are marketed, there is a lot of risk in these investments. Despite this, there has still been a lot of demand from investors. They are probably thinking they can make good returns before exiting when the runway starts to get shorter. The way ETH is looking, I don’t see this being too successful for Bitmine.

[asriloni]

It seems Bitmine has not yet given up. They're trying to copy Saylor's ponzi model. The decision to issue dividend preferred stock is showing how they're lacking of money to buy more eth right now. So i won't be surprised if they will be forced to sell their ethereum someday in order to raise cash to pay the

dividend. However, the thing that may be different is that bitmine has passive income from their staking ethereum. So they can use it to pay the dividend.

Nevertheless, I don't see it as an opportunity because it's a high risk instrument. It's pretty much similar to the STRC model owned by Strategy, which is offering 11.5% APY to its STRC holders.

This kind of ponzi much more about gambling by the company itself. Their dividend preferred stock will be strongly driven by the fluctuate of asset hold by the company.

[fullfitlarry]

Strive was the first treasury company to copy Strategy, by offering a dividend paying preferred stock. Now Bitmine is following along because continuing to dilute shareholders of their common stock is no longer working. 9.5% is the starting annual yield and if they are anything like STRC and SATA, they will have to keep raising it to stay at their target price.

Regardless of how they are marketed, there is a lot of risk in these investments. Despite this, there has still been a lot of demand from investors. They are probably thinking they can make good returns before exiting when the runway starts to get shorter. The way ETH is looking, I don’t see this being too successful for Bitmine.

I was thinking that they could have been some kind of break point in price, like Strategy, as I hear the CEO that it might be $7k before they really took a lot of how big their losses already. But not sure about Bitcoin, because my research says that they might be buying at a higher price so it's really going to be very hard for them once ETH doesn't recover in the next bull run.

But let's see, I think they can still get a lot of investors with this kind of offerings. Too good to be true offer, but who knows, everyone is greedy and wanted to profit and Bitmine is a big company too so they precede with their brand name.

[2stout]

To me it absolutely smells of a bailout and stinks like Ponzi.  Just another way of suckering in investors and leaving them holding the bag as this 9.5% isn't sustainable.  What revenue generation is backing this sort of payout besides the obvious Ponzi, i.e., other investors' money? 

[shinratensei_]

The big question need to be answered? where the dividend come from? 9.5% is pretty high and it seems Bitmine is already so deep entrenched into the Ethereum speculation they want to go all in and raise money to offset their mistake of accumulating at peak.

My thought is that, this dividend preferred stock might work wonder if they can get the timing right, buying at the bottom with the raised funds, otherwise it might turn into a disaster.