Stronghold Digital Mining introduced it’s contemplating a sale or different strategic alternate options aimed toward maximizing shareholder worth. The announcement got here alongside the corporate’s disclosure of its sturdy first-quarter monetary and operational outcomes on Might 2.
As a part of its strategic evaluate, Stronghold, with the steerage of Cohen and Firm Capital Markets and authorized recommendation from Vinson & Elkins LLP, is exploring varied choices.
These embrace the potential sale of all or components of its enterprise or different strategic transactions involving its belongings. The evaluate comes at a time when the corporate observes a valuation discrepancy in comparison with its friends within the Bitcoin mining, service provider energy, and knowledge middle sectors.
Nevertheless, the plan will not be particular, and there’s no deadline or timetable. Stronghold doesn’t intend to make one other announcement until the board approves a transaction, till it does so, or until it decides a disclosure is critical.
Rising income
Stronghold reported $27.5 million of income in the course of the first quarter of 2024, up 27% sequentially and 59% year-over-year. The overwhelming majority of income, $26.7 million, got here from crypto operations, whereas the rest got here from power gross sales and different actions.
The crypto mining firm reported diminished fastened prices within the first quarter, down 3% sequentially and 11% year-over-year.
It reported GAAP internet revenue of $5.8 million and non-GAAP Adjusted EBITDA of $8.7 million within the first quarter.
Low valuation
Regardless of robust monetary efficiency within the above areas, Stronghold CEO and chairman Greg Beard stated the corporate has witnessed a valuation dislocation in comparison with peer Bitcoin mining corporations and different associated firm sorts.
In response to knowledge from CompaniesMarketCap, Stronghold at the moment has a market cap of $40.4 million, significantly beneath the main crypto mining firm, Marathon, which has a market cap of $4.65 billion.
Beard described Stronghold’s potential for enlargement of mining energy and asserted the corporate has qualities that set it other than most rivals.
Stronghold boasts substantial infrastructure, together with over 130 megawatts of absolutely energized knowledge middle capability and 4.1 exahash per second of put in hash price capability, with potential enlargement as much as 7 EH/s.
Moreover, the corporate owns 750 acres of land, transmission strains, and two service provider energy crops with vital carbon seize potential, enhancing its attraction to potential consumers or companions.
