CleanSpark, a Bitcoin miner, saw a significant 10% drop in after-hours trading on Thursday following the modification of its at-the-market (ATM) offering agreement to potentially sell up to $800 million worth of its stock.
Originally, CleanSpark had entered into a $500 million ATM offering arrangement with New York investment banking firm H.C. Wainwright & Co on Jan. 5, 2024. The company stated in a March 28 SEC filing that it could periodically offer and sell shares of its common stock at $0.001 per share.
Stock dilution is a common method for publicly-listed companies to raise additional capital, and CleanSpark is not the only Bitcoin miner to utilize an ATM agreement for this purpose. Riot Platforms and Marathon Digital Holdings had previously entered into $750 million ATM agreements in August and October, respectively.
With a market capitalization of $4.2 billion, an $800 million stock offering could potentially dilute CLSK shares by 19%. Despite starting the trading day at $23.20, CleanSpark’s stock price dropped by 16% to $19.1 in after-hours trading, including an 8.2% decrease during regular trading hours, according to Google Finance data.
Although the stock experienced a decline, CleanSpark has seen substantial growth, with a 95% increase in 2024 and a remarkable 685% surge over the past year.
CleanSpark is gearing up for the upcoming Bitcoin halving event, slated for April 20, which will result in a reduction of Bitcoin mining rewards from 6.25 BTC ($441,000) to 3.125 BTC ($220,500).
A recent report by CoinShares revealed that CleanSpark boasts the lowest cost production to mine one Bitcoin post-halving at $26,900. The company anticipates its hash rate to double in the first half of 2024 after securing agreements to purchase new mining facilities that immediately added 2.4 exahashes per second (EH/s) in Mississippi.
In addition, CleanSpark agreed to acquire another mining facility in Dalton, Georgia, for $6.9 million, producing 0.8 EH/s. However, this facility is still under construction and won’t be operational until April 2024.
Despite attempts to reach out for comment, Cointelegraph did not receive a response from CleanSpark by the time of publication.
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