Alternative Energy Bitcoin Mining Company Debuts IPO With Higher Stock Prices

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Bitcoin mining company Stronghold Digital Mining, which has environmentally beneficial operations as it’s powered by coal refuse sites, debuted its Initial Public Offering (IPO) on the NASDAQ under the ticker SDIG. The company upsized its offering and priced its share at $19, according to an announcement, which is higher than the $16 to $18 the company initially announced.

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This IPO comes amid an increased appetite for cryptos, reflected yesterday in the successful debut of the first Bitcoin-linked exchange traded fund (ETF). The ProShares Bitcoin Strategy ETF (BITO), based on future contracts, finished the day up 4.9%. This helped send the price of Bitcoin up, as well. The crypto was at $64,300 this morning, up 3.4% in the past 24 hours, according to CoinMarketCap data.

Stronghold’s Bitcoin mining operations are powered through the reclamation of coal refuse sites. Coal refuse is the environmentally harmful byproduct of Pennsylvania’s legacy coal-mining operations, according to its website. They remove coal refuse from piles and burn it in an emissions-controlled manner at their wholly owned generation facilities.

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Stronghold said it expects to receive approximately $114.8 million of net proceeds from the offering, or $132.5 million if the underwriters exercise their option to purchase additional shares in full. The company intends to use the proceeds for general corporate purposes, including for acquisitions of miners and power generating assets.

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The company operates 3,000 crypto asset mining computers — miners — with hash rate capacity of approximately 185 petahash per second (“PH/s”), according to a Securities and Exchange Commission filing. In addition, it has entered into definitive agreements with three suppliers to purchase approximately 26,150 additional miners with a total hash rate capacity equal to over 2,500 PH/s. Of these miners, 72% are scheduled to be delivered in 2021, with the next batch scheduled for delivery in October 2021, 21% are scheduled to be delivered in the first quarter of 2022, and the remaining 6% are scheduled to be delivered during the remainder of 2022, according to the SEC filing.

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With part of the proceeds of this offering, we intend to procure approximately 55,800 additional miners, which we anticipate will bring our total hash rate capacity to over 2,100 PH/s by December 2021 and to over 8,000 PH/s by December 2022.

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Last updated: October 20, 2021

About the Author

Yaël Bizouati-Kennedy is a former full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored  the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

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