CleanSpark, a Bitcoin miner, saw a significant 10% drop in after-hours trading on Thursday following an update to its at-the-market (ATM) offering agreement, allowing for the sale of up to $800 million of its stock.
Initially, CleanSpark had a deal for a $500 million ATM offering with H.C. Wainwright & Co, a New York investment banking firm, on Jan. 5, 2024. The agreement stated that CleanSpark could offer and sell shares of its common stock at $0.001 per share, as disclosed in a March 28 SEC filing. This move is a common strategy used by publicly-listed companies to raise additional capital.
CleanSpark is not alone in pursuing such agreements, as both Riot Platforms and Marathon Digital Holdings entered into $750 million ATM agreements last August and October, respectively. With a current market capitalization of $4.2 billion, the $800 million stock offering would result in a 19% dilution of CLSK shares. The stock started the trading day at $23.20 but is now down 16% to $19.1 in after-hours trading, indicating an 8.2% decline during regular trading hours, according to Google Finance.
Despite this recent slump, CLSK has seen a remarkable 95% increase in 2024 and a staggering 685% surge over the last 12 months.
CleanSpark is gearing up for the upcoming Bitcoin halving event anticipated to take place on April 20, which will see mining rewards reduced from 6.25 BTC ($441,000) to 3.125 BTC ($220,500). The company boasts the lowest cost production to mine one Bitcoin post-halving at $26,900, according to a Jan. 12 CoinShares research report.
In a bid to increase its hash rate, CleanSpark expects it to double in the first half of 2024 following an agreement to acquire four new mining facilities in Mississippi, valued at $19.8 million, which immediately added 2.4 exahashes per second (EH/s) to the firm. Additionally, an agreement was made to purchase another mining facility in Dalton, Georgia, for $6.9 million, expected to produce 0.8 EH/s. However, this facility is currently under construction and won’t be operational until April 2024.
Despite numerous attempts to reach out for comment, CleanSpark did not respond by the time of publication.
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