Stronghold Digital Mining introduced it’s contemplating a sale or different strategic options aimed toward maximizing shareholder worth. The announcement got here alongside the corporate’s disclosure of its strong first-quarter monetary and operational outcomes on Could 2.
As a part of its strategic overview, Stronghold, with the steering of Cohen and Firm Capital Markets and authorized recommendation from Vinson & Elkins LLP, is exploring varied choices.
These embody the potential sale of all or elements of its enterprise or different strategic transactions involving its belongings. The overview 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 heart sectors.
Nevertheless, the plan shouldn’t be particular, and there’s no deadline or timetable. Stronghold doesn’t intend to make one other announcement except the board approves a transaction, till it does so, or except 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 vitality gross sales and different actions.
The crypto mining firm reported decreased 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 mentioned the corporate has witnessed a valuation dislocation in comparison with peer Bitcoin mining corporations and different associated firm varieties.
In line with knowledge from CompaniesMarketCap, Stronghold at the moment has a market cap of $40.4 million, significantly under the main crypto mining firm, Marathon, which has a market cap of $4.65 billion.
Beard described Stronghold’s potential for growth 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 totally energized knowledge heart capability and 4.1 exahash per second of put in hash fee capability, with potential growth as much as 7 EH/s.
Moreover, the corporate owns 750 acres of land, transmission traces, and two service provider energy vegetation with important carbon seize potential, enhancing its attraction to potential patrons or companions.