2024 started with a sharp rise in the price of Bitcoin, but it has not been a kind year for the miners who run the cryptocurrency, with last month's “halving'' reducing the rewards given to the operating computers that process blockchain transactions. Ta.
Stronghold, a publicly traded Pennsylvania-based mining company, said on its earnings call today that it is considering the possibility of selling all or part of the company to “maximize shareholder value.” A press release shared that the company plans to announce that luck. The company's market capitalization is currently close to $40 million.
While many mining companies rely on existing grids to power computers that compete to process blocks of transactions and earn bitcoins, Stronghold We have pioneered a unique model of operating two burning facilities. The government pays companies to “recover” coal waste. ” By generating its own electricity through this process, Stronghold effectively functions as its own power plant, calling itself “the only public vertically integrated mining company with the objective of “regenerating and improving the environment.” ” is explained.
Despite the novel approach and the rise in Bitcoin prices after the approval of a Bitcoin ETF in January, the outlook for miners such as Stronghold has darkened since the April halving. Some analysts predicted that listed companies would have an advantage as operating costs increase as inefficient operations are taken offline, but mining company stock prices did not follow Bitcoin's surge.
Stronghold stock, worth about $11.25 in late 2024, was trading at about $3 on Wednesday. In late December, SEC filings revealed that CEO Greg Beard, who owns 10% of the company, sold nearly 40,000 shares after buying about 1 million shares in the previous year. It turned out that it did.
Stronghold's press release didn't say whether the decision to sell was related to pricing related to the halving, but Beard told Kitco News in March that the event was “a sign that we're different.” “We're going to show you soon why it's important to own your power.”
“Our value proposition is that if power is expensive, we can shut down the Bitcoin mining data center immediately, as this is not an essential service,” he said.
Instead, the press release attributes the decision to “valuation misalignment” when comparing Stronghold's market value to the valuations of other public Bitcoin mining companies, commercial power companies, and data centers. . Beard said in a statement that the company could potentially expand its existing capabilities into either Bitcoin mining or advanced computing for AI, as other companies are exploring. A company spokesperson declined further comment.
