Etherzilla (ETHZ) Stock Plummets 10.6% on $516M Debt Redemption, Announces $21.1M Stake in Zippy Lending Platform

Nasdaq-listed Ethereum investment firm Etherzilla Corporation (ticker: ETHZ) saw its stock price drop sharply by 10.59% on December 10, 2025, following the announcement of a major debt restructuring plan. The company's stock fell from $11.97 to $10.05 after it disclosed plans to redeem its entire $516 million worth of convertible notes due in 2028 by December 30, 2025.

The redemption will be executed at a purchase price of 117% of the outstanding principal amount, plus accrued and unpaid interest. Etherzilla stated it will use restricted cash pledged as collateral to facilitate the redemption. CEO McAndrew Rudisill described the move as a "critical part of the company’s capital allocation strategy" aimed at streamlining its capital structure, enhancing financial flexibility, and strengthening its balance sheet ahead of planned strategic initiatives.

Simultaneously, Etherzilla announced a significant strategic investment in the institutional crypto lending sector. The company acquired a 15% stake in Zippy, an institutional-grade digital asset lending platform, in a deal valued at $21.1 million. The acquisition was structured as a hybrid transaction: $5 million paid in cash and $16.1 million paid in Etherzilla common stock, aligning the long-term interests of both companies.

The company highlighted that both moves—the debt redemption and the Zippy investment—are part of its broader strategy to accelerate revenue-generating activities and improve profitability. Etherzilla specifically mentioned its focus on the tokenization market and bringing real-world assets on-chain, with recent investments in both Karus and Zippy underscoring this commitment.

While the immediate market reaction to the debt redemption was negative, raising investor concerns about short-term cash flow impact, management remains optimistic about long-term prospects. The Zippy investment is positioned as a vote of confidence in the infrastructure layer of crypto finance and is seen as lending legitimacy to the institutional DeFi lending sector.