Stronghold Digital Mining introduced it’s contemplating a sale or different strategic options geared toward maximizing shareholder worth. The announcement got here alongside the corporate’s disclosure of its strong first-quarter monetary and operational outcomes on Might 2.
As a part of its strategic overview, Stronghold, with the steerage of Cohen and Firm Capital Markets and authorized recommendation from Vinson & Elkins LLP, is exploring numerous choices.
These embody the potential sale of all or components 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 information middle sectors.
Nevertheless, the plan is just not 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 important.
Rising income
Stronghold reported $27.5 million of income through 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 lowered mounted 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 companies and different associated firm sorts.
Based on information 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 enlargement of mining energy and asserted the corporate has qualities that set it aside from most opponents.
Stronghold boasts substantial infrastructure, together with over 130 megawatts of absolutely energized information 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 traces, and two service provider energy vegetation with important carbon seize potential, enhancing its enchantment to potential patrons or companions.
