With a $4.2 billion market capitalization, a $800 million stock offering would cause a 19% share dilution for CLSK.
CleanSpark, a Bitcoin miner, experienced a 10% decline in after-hours trading on Thursday following an amendment to its at-the-market (ATM) offering agreement to sell up to $800 million of its stock.
Initially, CleanSpark had entered into a $500 million ATM offering agreement with New York investment banking firm H.C. Wainwright & Co on Jan. 5, 2024. According to a March 28 SEC filing, CleanSpark stated its intention to occasionally offer and sell shares of its common stock at $0.001 per share.
Primary stock dilution is a common tactic utilized by publicly-listed companies to raise additional capital.
CleanSpark is not alone in pursuing an ATM agreement for this purpose. Other Bitcoin miners, such as Riot Platforms and Marathon Digital Holdings, have also entered into similar agreements, with both companies signing $750 million ATM agreements in August and October.
With a market capitalization of $4.2 billion, an $800 million stock offering would result in a 19% dilution of CLSK shares.
CLSK began the trading day at $23.20 but has since dropped by 16% to $19.1 in after-hours trading, including an 8.2% decline during regular trading hours, as reported by Google Finance.
CleanSpark, along with numerous other Bitcoin miners, is gearing up for the impending Bitcoin halving event scheduled for April 20. This event will result in a reduction of Bitcoin mining rewards from 6.25 BTC (equivalent to $441,000) to 3.125 BTC (equivalent to $220,500).
According to a Jan. 12 research report by CoinShares, CleanSpark claims to have the lowest cost production for mining one Bitcoin post-halving, estimated at $26,900.
On February 6, Cleanspark announced its anticipation of doubling its hash rate in the first half of 2024. This increase is attributed to a recent agreement to acquire four new mining facilities in Mississippi, valued at $19.8 million. The acquisition immediately added 2.4 exahashes per second (EH/s) to the firm's capacity.
Additionally, CleanSpark agreed to purchase another mining facility in Dalton, Georgia, for $6.9 million. However, this facility is currently under construction and is expected to be operational by April 2024. Once completed, it will contribute 0.8 EH/s to CleanSpark's mining capacity.
March 2024, Cryptoniteuae