CleanSpark shares fell by 10% after the announcement of the issue of additional securities worth up to $800 million

What’s new? The share price of bitcoin miner CleanSpark (CLSK) fell 10% in trading on March 28 after the company amended its offering agreement. They involve the issuance of up to $800 million in additional securities. Stock dilution is a common strategy for public companies to raise additional capital.

Report to the SEC

What else is known? On January 5, CleanSpark signed a $500 million deal with New York investment firm H.C. Wainwright & Co. As part of it, CleanSpark will be able to periodically place shares of common stock at $0,001 per share, the company notified the US Securities and Exchange Commission (SEC) on March 28.

With a market capitalization of $4,2 billion, the $800 million offer would effectively result in a 19% decline in CLSK’s stock price. By the time the news was written, the daily decline in the value of the securities was 8,22%, with CLSK trading at $21,21 on the Nasdaq.

Despite this decline, the stock price has risen by 68,33% overall since the beginning of the year and 712,64% over the past 12 months.

CleanSpark, like other bitcoin miners, is gearing up for an upcoming halving event that will see the reward for a mined block in the blockchain drop from 6,25 to 3,125 BTC. This event, according to aggregator CoinGecko, will take place on April 20.

According to a January 12 report from analysts at investment firm CoinShares, CleanSpark’s cost to mine a single bitcoin after halving would be $26 900, well below competitors.

On February 6, CleanSpark said it expects to double its hashrate in the first half of 2024 as a result of a recent agreement to buy four mining farms in Mississippi valued at $19,8 million with a total of 2,4 EH/s.

The company will also buy a farm in Dalton, Georgia for $6,9 million with a hashrate of 0,8 EH/s. However, that facility is under construction and will not be ready until April.

Bloomberg: Miners from Africa and South America are buying old equipment in the United States ahead of halving

Reducing the reward for a mined block makes it unprofitable to use less energy-efficient equipment in the US

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In early January, CleanSpark announced the purchase of 160 000 devices from manufacturer Bitmain’s Model S21 with a combined hashrate of 32 EH/s. Earlier, the firm announced the launch of its own marketplace for selling mined coins.