The Bitcoin (CRYPTO: BTC) rally may not have come at a better time for a New York-headquartered cryptocurrency miner.
Timing It Right: Stronghold Digital Mining Inc (NASDAQ:SDIG), a vertically integrated crypto asset mining company with a particular focus on Bitcoin mining, timed its initial public offering right.
Bitcoin picked up the pace last week ahead of the launch of the first U.S. Bitcoin futures-based ETF and rallied through its debut. The crypto hit a record high of $66,930.39 Wednesday before giving back some of the gains.
Stronghold Digital latched on this optimism surrounding cryptos in general, and Bitcoin in particular, and made a strong Wall Street debut on Wednesday.
Stronghold’s Business: The Bitcoin miner wholly owns and operates a low-cost, environmentally beneficial coal refuse power generation facility in Pennsylvania.
The company said in its S-1 filing with the SEC it is committed to generating its energy and managing its assets sustainably.
“We believe our power generation facility is environmentally beneficial because we remove legacy coal refuse and facilitate the remediation of land and water, with power generation being the byproduct of this activity,” the company added.
The company currently operates about 3,000 crypto asset mining computers with hash rate capacity of 185 petahash per second. It has also agreed with three suppliers to buy about 26,150 additional miners with a total hash rate capacity of over 2,500 PH/s. Stronghold said it intends to buy about 55,800 additional miners using the proceeds from the IPO.
Stronghold’s IPO: Through the IPO, Stronghold offered 6.687 million shares at $19 apiece, with the gross proceeds expected to be $114.8 million, or $132.5 million if the overallotment option is exercised.
The company said it expects to use the proceeds for general corporate purposes, including for acquisitions of miners and power generating assets.
The offering is expected to close Friday.
Stronghold’s shares began trading on the Nasdaq Wednesday. The stock opened at $27 and moved mostly roughly sideways, without much volatility, before ending the session at $28.90, a 52.11% gain from the offer price of $19.
The Financials: Stronghold reported revenues of $8.484 million for the year ended Dec. 31, 2020, and $11.05 million for the six months ended June 30, 2021. The loss for the full year 2020 was $8.21 million and for the first half of 2021 was $9.57 million.
Given predictions for a strong performance for Bitcoin and the accent on environment-friendly mining, Stronghold could be ready for the long haul.
SDIG Price Action: As of Thursday afternoon, Stronghold Digital Mining shares were down 9.90% at $26.07.