Bitcoin mining company CleanSpark is set to expand its operations by acquiring new mining facilities. The acquisition will provide CleanSpark with the necessary power and infrastructure to potentially double its hashrate within the first half of the year. The announcement of the acquisition caused CleanSpark’s shares to rise by almost 9%, with a peak increase of 10.8% as the price of bitcoin also saw a midday rise.
CleanSpark has agreed to purchase three “turnkey” sites in Mississippi for $19.8 million in cash. These sites will allow CleanSpark to simply plug in their existing hardware, providing a seamless transition. The transaction is expected to close within 21 days and the sites are projected to contribute around 14% of CleanSpark’s revenue shortly after closing.
In addition to the acquisition in Mississippi, CleanSpark plans to acquire a facility in Dalton, Georgia. The initial cash payment for this acquisition is set at $3.4 million, with an additional $3.5 million investment to complete the project by April. This facility will expand CleanSpark’s presence in Dalton to three sites.
CleanSpark’s CEO, Zachary Bradford, stated that the move into Mississippi is part of the company’s strategy to grow its operations and diversify its data center portfolio in a strategic manner. The company’s experience in the southeastern power markets through its operations in Georgia prepares them for their expansion into Mississippi, as both regions have similar electric reliability.
Electricity is one of the highest costs for bitcoin mining companies, alongside the cost of mining machines themselves. By acquiring new mining facilities, CleanSpark aims to optimize its operations and reduce costs. The company plans to quickly integrate its own servers into the acquired facilities, allowing them to operate almost immediately after closing the deal. This streamlined process will shorten the path to return on investment (ROI) and contribute to the company’s profitability.
As the bitcoin halving approaches, the crypto industry anticipates consolidation among bitcoin miners. The halving will cut miner rewards in half, making it harder for smaller and less efficient mining companies to remain profitable. CleanSpark’s CEO, Zachary Bradford, has previously mentioned that the company expects some miners to exit the market post-halving. CleanSpark, on the other hand, is actively looking for potential facilities where it can easily integrate its own machines.
The performance of bitcoin mining stocks is closely tied to the price of bitcoin itself. CleanSpark, like other mining companies, benefits from bitcoin price increases as they result in higher mining revenue. In 2023, bitcoin miners were among the top performers, outperforming even bitcoin itself. CleanSpark experienced a significant gain of about 440% in 2023, compared to bitcoin’s 157% increase.
The new acquisitions by CleanSpark are expected to enhance the company’s operations and contribute to its growth in the coming months. With the potential to double its hashrate and the diversification of its data center portfolio, CleanSpark continues to position itself as a key player in the bitcoin mining industry. As the industry evolves and adapts to changes such as the halving, CleanSpark’s strategic moves pave the way for future success.
Leave a Reply