CleanSpark Bitcoin Miner Drops 10% on $800M Share Offering

CleanSpark’s bitcoin mining tool experienced a 10% decline in after-hours trading on Thursday following the company’s adjustment to its market (ATM) offering agreement, expected to sell up to $800 million of its shares. Initially, CleanSpark had inked a $500 million ATM machine offering agreement with investment bank HC Wainwright & Co in New York on January 5, 2024. In this agreement, CleanSpark stated they could offer and sell their common stock at $0.001 per share, according to SEC filings on March 28.

CleanSpark’s at the market agreement with H.C. Wainwright & Co. LLC.

Primary stock dilution is a common strategy that publicly listed companies often employ to raise additional capital. CleanSpark is not the only Bitcoin mining company involved in this ATM agreement. Alongside Riot Platforms and Marathon Digital Holdings, both participated in $750 million ATM agreements in August and October of the previous year.

With a market capitalization of $4.2 billion, the $800 million stock offering is projected to dilute CLSK shares by up to 19%. CLSK stock started trading at $23.20 but has since dropped by 16% to $19.10 after hours, including an 8.2% decrease during trading hours, according to Google Finance. Despite the stock downturn, CLSK has still surged by 95% in 2024 and 685% over the past 12 months.

CleanSpark’s change in stock price over the last trading day. Source: Google Finance

CleanSpark is one of many Bitcoin mining tools gearing up for the upcoming Bitcoin halving event, scheduled for April 20. This event will witness the Bitcoin mining reward decrease from 6.25 BTC ($441,000) to 3.125 BTC ($220,500). The company prides itself on having the lowest production cost to mine a Bitcoin post-halving, according to a CoinShares research report on January 12.

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On February 6, CleanSpark announced their intention to double their mining rate in the first half of 2024 through a recent agreement to purchase four new mining facilities in Mississippi, valued at $19.8 million, generating 2.4 exahashes per second (EH/s) for the company. They also agreed to acquire another mining facility in Dalton, Georgia for $6.9 million, expected to produce 0.8 EH/s. However, this facility is still under construction and is not expected to be completed until April 2024.