BMNR finished a brutal week
BMNR started the week trading at $18.82, approximately a 15% discount to mNAV, with Ethereum trading at $2,126.00 By Friday, BMNR had fallen 7.65% to $17.38, and Ethereum dropped about 9.36% to $1,923.00
What caused the selloff? Could be a number of things, but there are concerns over inflation and higher U.S. interest rates. There were also significant forced liquidations across the cryptocurrency market as prices declined. CoinGlass was showing Ethereum liquidations at approximately 71% of their highest level over the previous 30 days, which it classified as "Near Extreme." Most of these liquidations involved leveraged long positions, creating additional selling pressure and potentially accelerating Ethereum's decline.
Despite the drop, BMNR's discount to mNAV actually narrowed slightly to approximately 13.9%, suggesting the share price largely followed the decline in Ethereum.
BMNR also filed its annual 10-K this past week, and there were mixed results. The company reported a $6.31 billion net loss for the fiscal year ended August 31, 2026. Approximately $6.23 billion was attributed to unrealized declines in its cryptocurrency holdings rather than realized losses.
They also mentioned that the company's accounting procedures and corporate governance continued to have material weaknesses in internal financial reporting controls. Management has taken corrective actions, including hiring additional accounting and compliance personnel, bringing in external specialists, implementing a new accounting system and introducing formal control procedures. However, some controls remain incomplete or haven't been operating long enough to demonstrate effectiveness.
KPMG issued an unqualified audit opinion on BMNR's financial statements, meaning they were fairly presented in all material respects under U.S. accounting standards. That is reassuring, although KPMG did not audit the effectiveness of the company's internal financial reporting controls, and those weaknesses haven't been resolved.
This is something worth monitoring considering BMNR went from a relatively small Bitcoin mining operation to the world's largest Ethereum treasury in a very short period.
The other concern was the $376.9 million in general and administrative expenses reported for the fiscal year. That's a substantial amount, and while it did included $200 million in expenses management classified as one-time capital-raising, advisory, legal and consulting fees, along with approximately $59 million in non-cash stock-based compensation. It is still a significant amount spent on administration.
The company reported approximately $121.4 million in staking and validation revenue for the year. As its staking operations expand, we should see that revenue increase, but the question is whether it will eventually generate enough to cover ongoing operating expenses and the preferred share dividends.
BMNR has approximately $33.25 million in annual preferred dividend obligations from its Series A preferred shares alone. If staking revenue doesn't eventually cover its ongoing expenses and dividend obligations, the company would need to rely on existing reserves, asset sales or additional financing. That could potentially include further shareholder dilution, particularly if it continues issuing common shares to fund operations or expand its Ethereum holdings.
Overall, it was another difficult week for BMNR shareholders.
