CleanSpark’s Stock Falls 10% Following $800M Share Offering Announcement
BollywoodFever, March 28: Bitcoin mining company CleanSpark saw its shares fall by 10% in after-hours trading on Thursday following an announcement that it would increase its at-the-market (ATM) offering to $800 million worth of stock.
Originally, CleanSpark had established a $500 million ATM offering agreement with H.C. Wainwright & Co, a New York-based investment bank, on January 5, 2024. According to a March 28 SEC filing, the company noted it might periodically offer and sell its common stock at a nominal price of $0.001 per share.
Issuing additional shares as a means to raise capital is a strategy frequently employed by publicly traded companies.
CleanSpark joins other Bitcoin mining firms like Riot Platforms and Marathon Digital Holdings, which have also undertaken significant ATM agreements of $750 million each in recent months.
Following the announcement, CleanSpark, which boasts a market cap of $4.2 billion, saw its stock potentially diluted by 19% due to the $800 million offering.
The stock, which opened the day at $23.20, dropped 16% to $19.1 in after-hours trading. This decline includes an 8.2% drop during the regular trading session, as reported by Google Finance.
Despite this downturn, CleanSpark’s stock has experienced a remarkable rise, increasing by 95% in 2024 and 685% over the past year.
The company is gearing up for the anticipated Bitcoin halving event on April 20, which will reduce the mining reward from 6.25 BTC ($441,000) to 3.125 BTC ($220,500).
CleanSpark is highlighted for its efficiency, with a CoinShares research report on January 12 revealing it has the lowest cost of production per Bitcoin post-halving, at $26,900.
On February 6, CleanSpark announced plans to double its hash rate in the first half of 2024 following a $19.8 million acquisition of four new mining facilities in Mississippi, immediately adding 2.4 exahashes per second (EH/s) to its operations.
Additionally, the company has agreed to purchase another mining facility in Dalton, Georgia, for $6.9 million, expected to contribute 0.8 EH/s upon completion in April 2024.
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