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Stronghold Digital Mining, Inc. (NASDAQ: SDIG), a vertically built-in Bitcoin mining agency, has introduced the initiation of a proper strategic assessment course of to discover alternate options for “maximizing shareholder worth,” together with the potential sale of all or a part of the corporate.
In its first-quarter 2024 earnings launch, Stronghold reported revenues of $27.5 million, a 27% improve sequentially and a 59% improve year-over-year. The corporate additionally reported a GAAP Web Revenue of $5.8 million and a non-GAAP Adjusted EBITDA of $8.7 million for the quarter. GAAP refers to “usually accepted accounting rules,” a set of accounting guidelines, requirements, and pointers that publicly traded firms within the US adhere to.
The lately concluded earnings name from Stronghold talked about that the agency has executed an settlement with Voltus, Inc. to help in capturing demand response alternatives, which may additional improve economics when importing energy from the grid.
Notably, Stronghold has retained Cohen and Firm Capital Markets as its monetary advisor and Vinson & Elkins LLP as its authorized advisor to assist the corporate’s administration staff and board in the course of the strategic assessment course of.
Stronghold, which operates two services that burn coal refuse to generate electrical energy for its mining operations, has a present market capitalization of practically $40 million. The corporate’s shares, which had been buying and selling at round $11.25 in late 2023, have lately been buying and selling at roughly $3.
Regardless of these monetary outcomes, Stronghold’s board and administration staff have determined to discover strategic alternate options, citing a “valuation dislocation” when evaluating the corporate’s market worth to these of public Bitcoin mining friends, service provider energy firms, and information heart and energy era property.
“We imagine that our 130 MW of present Bitcoin mining capability may probably be expanded to over 400 MW for both Bitcoin mining or superior computing, equivalent to that which is used for synthetic intelligence and machine studying,” mentioned Greg Beard, chairman and CEO of Stronghold.
The choice to discover strategic alternate options comes within the wake of the latest Bitcoin halving occasion, which has raised considerations in regards to the profitability of mining operations. Nevertheless, Stronghold’s press launch didn’t explicitly attribute the choice to halving-related pricing, regardless of Beard’s statements that the mining firm must adapt to the consequences of Bitcoin halving on output effectivity.
The corporate emphasised that there isn’t any definitive timetable set for the completion of the assessment, and there may be no assurance that any proposal shall be made or accepted, or that any transaction shall be consummated.
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