- CleanSpark’s stock price plunged in after-hours trading after the company filed to sell $800 million in new shares, diluting the stock.
- The offering comes as CleanSpark and other miners prepare for Bitcoin’s upcoming halving event which will reduce mining rewards.
- Despite concerns over dilution, CleanSpark seems focused on maintaining profitability post-halving through expansion and low mining costs.
Bitcoin miner CleanSpark’s stock price fell sharply in after-hours trading after the company filed to sell $800 million in shares. This dilution of the company’s stock has investors worried.
CleanSpark’s Stock Offering
CleanSpark originally signed a deal with investment bank HC Wainwright & Co. on January 5th to sell up to $500 million in stock through an at-the-market (ATM) offering. On March 28th, CleanSpark amended this agreement to increase the offering to $800 million. With CleanSpark’s market capitalization around $1.8 billion, this would dilute existing shares by nearly 19%.
CleanSpark’s Share Price Falls
CleanSpark’s stock price reacted negatively to the news. After starting the day at $23.20 per share, the stock fell 14% to $19.41 in after-hours trading. This included an 8.2% drop during normal trading hours. Despite the plunge, CleanSpark’s stock price is still up 95% in 2023 and 685% over the past 12 months.
CleanSpark Prepares for Bitcoin Halving
The expanded stock offering comes as CleanSpark and other Bitcoin miners prepare for Bitcoin’s upcoming halving event on April 8th. The halving will reduce Bitcoin mining rewards from 6.25 BTC to 3.125 BTC. Research shows CleanSpark has one of the lowest costs to mine Bitcoin post-halving.
The company expects to double its computing power in early 2024 through new mining facilities. While the stock offering raises concerns, CleanSpark appears focused on maintaining profitability after the halving reduces income. The long-term impact on the company’s growth remains uncertain.
