As a researcher with a background in the Bitcoin mining industry, I find CleanSpark’s acquisition of GRIID for $155 million to be an intriguing development. With this deal, CleanSpark will gain an additional 20 MW of power capacity and is expected to add another 400 MW in Tennessee over the next two years. This growth trajectory aligns with CleanSpark’s previous success in Georgia, where they built out over 400 MW of infrastructure backed by long-term power contracts.
“Yesterday, CleanSpark (CLSK), a prominent publicly-traded Bitcoin mining company, disclosed that it had struck a deal to acquire fellow miner GRIID Infrastructure using only shares as payment.”
This $155 million agreement instantly provides CleanSpark with an extra 20 megawatts (MW) of electricity, enhancing their mining activities. An additional 400 MW is projected to be incorporated into Tennessee’s grid for CleanSpark within the next two years.
CleanSpark Acquired GRIID For $155 Million
In the merger arrangement, CleanSpark was obligated to take on all debts and other liabilities belonging to GRIID. Additionally, they were responsible for granting a working capital loan worth $5 million to GRIID. Lastly, CleanSpark had to pay off a bridge loan of $50.9 million to meet other contractual obligations from the smaller mining company.
“In a press release, Zach Bradford, CleanSpark’s CEO, stated that this acquisition will provide us with a well-defined and unwavering route to replicate the success we experienced in Georgia during the past three years in Tennessee over the coming three years.”
“We constructed and established approximately 400 megawatts of infrastructure, supported by robust, long-term power agreements.”
After the announcement was made, I observed a significant drop of over 50% in GRIID’s share price, whereas CLSK experienced a modest increase of 4%. This discrepancy suggests that some traders perceived the merger agreement as a distressed sale.
As an analyst, I’d rephrase it as follows: The closing price of CleanSpark’s shares on Thursday was $16.05 each, translating into a market capitalization of approximately $3.6 billion for the company, based on data from Google Finance. Notably, CleanSpark has been among the top-performing mining stocks so far this year, registering impressive gains of over 47%, bucking the downward trend observed in most other industry players whose stocks took a hit prior to the Bitcoin halving event.
Bitcoin Mining Acquisitions
In the past few months, CleanSpark isn’t the only mining company that has announced a takeover. Beginning in late May, Riot Platforms (RIOT) has been making a hostile bid for Bitfarms (BITF), proposing to purchase the company at a price of $2.30 per share.
A month ago, Riot Blockchain made a buyout proposal to Bitfarms, which was initially declined. Riot expressed concern that Bitfarms’ board of directors might not be prioritizing the interests of all shareholders.
As of Thursday, BITF closed at $2.59 per share. RIOT is down 11% since last month at $9.12 a share.
Core Scientific (CORZ), which was once the largest Bitcoin mining company but emerged from bankruptcy, has received a buyout proposal worth approximately $1 billion from tech firm CoreWeave. As a result, CORZ’s stock price has surged by around 92% this month following this announcement.
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2024-06-28 02:24