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CleanSpark jumps on plans to buy four bitcoin mining facilities ahead of the halving

A series of bitcoin mining units inside a container at a Cleanspark facility in College Park, Georgia, US, on Friday, April 22, 2022.

Elías Nouvelage | Bloomberg | fake images

bitcoin miner clean spark rose on Tuesday after the company said it will acquire new mining facilities that will give it the power and infrastructure to potentially double its hash rate in the first half of the year.

CleanSpark shares were last up nearly 9%. At one point, the stock rose as much as 10.8%, also helped by a midday surge in the price of bitcoin.

The company agreed to buy three “turnkey” sites (meaning they only need to connect their existing hardware to the facilities) in Mississippi for $19.8 million in cash. That transaction will close within 21 days.

Additionally, CleanSpark plans to acquire a facility in Dalton, Georgia, for an initial cash payment of $3.4 million. It will then invest another $3.5 million to complete the project in April. The facility will expand its presence in Dalton to three sites.

“Our move to Mississippi is intended to grow our operations and diversify our data center portfolio in a measured manner,” CEO Zachary Bradford told CNBC. “Our operations in Georgia have given us significant experience in the southeastern energy markets…Mississippi is in the same electric reliability region, so we see a lot of synergies there.”

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CleanSpark rises up to 10% after the acquisition announcement. Aside from the mining machines themselves, electricity is one of the highest costs for bitcoin mining companies. Some have a contract with an energy producer in which they purchase a certain amount of energy annually at a fixed price. Miners who buy energy at spot prices risk losing with any increase in energy prices, often in summer or winter.

The cryptocurrency industry has been expecting consolidation among bitcoin miners – particularly those that are smaller, have higher costs or older, less efficient hardware – as miner rewards are expected to be cut in half. after the long-awaited Bitcoin halving in the spring.

Bradford previously told CNBC that CleanSpark expects some miners to fall by the wayside after that point, adding that the company was considering potential facilities where it could easily plug in its own machines. About a month ago, CleanSpark purchased 160,000 mining machines.

“The exciting thing about this expansion is that we will be able to quickly install our own servers so that we are operational almost immediately after closing the deal, shortening the path to return on investment in a very attractive way,” he said on Tuesday.

Generally, mining stocks benefit from bitcoin price increases because they translate into higher mining revenue for the company.

Bitcoin miners performed the best in 2023, surpassing even Bitcoin. CleanSpark gained about 440% last year, compared to 157% for bitcoin.

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