CleanSpark Shares Dip 10% After $800M Stock Sale Agreement; Plans for Bitcoin Halving Underway
Summary:
Bitcoin miner CleanSpark's shares fell by 10% after an agreement to sell up to $800 million of its stock, marking a departure from its initial $500 million at-the-market offering deal. Despite the recent decline, the company's shares have surged 95% in 2024 and 685% from last year. CleanSpark is also gearing up for the upcoming Bitcoin halving event by planning to double its hash rate, with recent investments in new mining facilities.
Shares in Bitcoin mining company CleanSpark dropped by 10% in after-hours trading on Thursday after a revision was made to its at-the-market (ATM) offer, making $800 million of its stock available for sale. Previously, CleanSpark had formed an agreement with the New York investment bank, H.C. Wainwright & Co, for a $500 million ATM offering on January 5, 2024, in which it proposed occasional sales of its ordinary shares at $0.001 each, according to a filing with the Securities and Exchange Commission (SEC) on March 28. Selling shares to raise extra capital, known as primary stock dilution, is a frequent practice among public companies. CleanSpark is not the only Bitcoin mining company to do this, with both Riot Platforms and Marathon Digital Holdings entering into similar $750 million agreements in August and October last year. If CleanSpark were to sell $800 million worth of its shares, it would dilute shares currently worth $4.2 billion by 19%. Despite starting the day at $23.20, the decline in after-hours trading reduced the price by 16% to $19.1 — an 8.2% fall during trading hours according to Google Finance. Regardless, CleanSpark's share price has seen a rise of 95% in 2024 so far and a whopping 685% over the last year. In advance of the expected Bitcoin halving event, which will reduce Bitcoin mining rewards from 6.25 BTC ($441,000) to 3.125 BTC ($220,500) on April 20, CleanSpark is one of several Bitcoin miners set to make preparations. It was reported by CoinShares on January 12, that CleanSpark can mine one Bitcoin for $26,900 after the halving — the most cost-effective production. As of February 6, the company expects to double its hash rate in the first half of 2024, driven by its recent acquisition of four new mining facilities in Mississippi for $19.8 million, yielding an immediate 2.4 exahashes per second (EH/s) for the company. It is also due to purchase another mining facility, currently under construction, in Dalton, Georgia, for $6.9 million, which will provide an additional 0.8 EH/s upon completion in April 2024. The company did not provide any comment on the matter at the time of source publication.
Published At
3/29/2024 3:27:06 AM
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