Stronghold’s Spence and Beard
Shares of Stronghold Digital Mining jumped 52% on their first day of trading on Wednesday, as investors show enthusiasm for fledgling cryptocurrency-related companies.
Trading on the Nasdaq under the ticker symbol “SDIG”, the Pennsylvania-based company, which extracts bitcoin from residual coal, has valued its stock at $ 19 per share, above the expected range of $ 16 to 18. $.
The stock closed at $ 28.90 after climbing to $ 31.90. This gives the company a market capitalization of around $ 1.3 billion, based on a fully diluted number of shares.
Stronghold debuted as bitcoin hit a new all-time high on Wednesday, hitting $ 67,000. The rally came a day after the launch of the very first exchange-traded fund linked to bitcoin. The ProShares Bitcoin Strategy ETF is expected to be the first of many such funds, making bitcoin accessible in a variety of ways to investors with a brokerage account.
Greg Beard, CEO of Stronghold, said the company chose to go public through an IPO rather than going down the route of a Special Purpose Acquisition Company (SPAC), which has been an increasingly popular way to enter the market over the past couple of years. Beard touted the credibility that comes with an IPO.
“I think we’re getting a lot more interest from investors because we’ve been vetted by the SEC on a regular basis,” Beard said. The company said it expected to raise nearly $ 115 million from the offer.
Stronghold competes in a competitive market that includes companies like Riot Blockchain, Marathon Digital and Core Scientific, which will list their shares on Nasdaq this year as part of a PSPC merger.
Extraction from residual coal
The United States has exploded into the bitcoin mining scene over the past year, and crypto companies across the country are looking for ways to compete, usually by finding the cheapest source of energy available.
When Beijing decided to ban all of its crypto miners, Stronghold co-founder Bill Spence saw an opening.
Spence, originally from Pennsylvania, has spent the past two decades cleaning up coal waste in his home state. He decided to turn to bitcoin mining earlier this year to try and capture some of the market share that was up for grabs.
Pennsylvania has been active in the coal mining industry since the late 1700s. Until 1975 it was legal to stockpile the byproducts of coal mining on the side of the mouth of the mine. . Beard said there are now more than 840 of these piles, some of which are 200 feet deep and almost look like “lunar landscapes.”
“They exist wherever coal mining existed,” Beard said.
Stronghold routes waste coal from these sites to its two facilities, where it uses fluid bed boilers to remove toxins. This helps generate electricity, which is then used to generate electricity for its bitcoin miners.
“We are recovering and remedying a problem that was inherited from decades of coal mining in Pennsylvania,” Beard said. “Bitcoin mining is the most economical use of this power today.”
When it comes to bitcoin profits, there isn’t much to report. Beard says the company has only mined a few hundred bitcoin so far.
“It is not enough just to brag,” he said.
Revenue for the first six months was only $ 7.9 million, up from $ 2.2 million in the same period a year earlier. The company lost $ 3.5 million in the first half of the year.
Beard said that by owning the power and mining equipment, Stronghold can generate electricity at a price that is twice the industry average.
“We’ll have better margins than everyone else,” Beard said. “I think all miners will be drawn to having their own power when they understand that this is the direction leaders are taking.”
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