Mining company Stronghold is considering selling the company, according to its latest financial report.
Stronghold Digital Mining announced that it is considering a sale or other strategic alternatives with the goal of maximizing shareholder value. The announcement comes as the company disclosed solid first-quarter financial and operating results on May 2.
As part of its strategic review, Stronghold is exploring various options with guidance from Cohen and Company Capital Markets and legal advice from Vinson & Elkins LLP.
This includes the potential sale of all or part of our business or other strategic transactions involving our assets. This review comes at a time when the company has observed valuation discrepancies compared to peers in the Bitcoin mining, commercial power, and data center sectors.
However, the plan is not set in stone and there are no deadlines or timetables. Stronghold will not make any further announcements unless and until its board of directors approves the transaction or determines disclosure is necessary.
increase in profits
Stronghold reported revenue of $27.5 million in the first quarter of 2024, an increase of 27% sequentially and 59% year-over-year. The majority of its revenue, $26.7 million, came from cryptocurrency operations, with the remainder coming from energy sales and other activities.
The cryptocurrency mining company reported fixed costs fell 3% sequentially and 11% year-over-year in the first quarter.
In the first quarter, we had GAAP net income of $5.8 million and non-GAAP adjusted EBITDA of $8.7 million.
low rating
Despite strong financial performance in the above sectors, Stronghold CEO and Chairman Greg Beard said the company has seen valuation differences compared to fellow Bitcoin mining companies and other related company types.
According to data from CompaniesMarketCap, Stronghold’s current market cap is $40.4 million, which is significantly lower than leading cryptocurrency mining company Marathon, which has a market cap of $4.65 billion.
Beard outlined Stronghold’s potential to expand its mining power and argued that the company has qualities that set it apart from most of its competitors.
Stronghold boasts significant infrastructure, including over 130 megawatts of fully active data center capacity and an installed hash rate capacity of 4.1 exahashes per second, scalable up to 7EH/s.
The company also owns 750 acres of land with significant carbon capture potential, transmission lines and two commercial power plants, making it attractive to potential buyers or partners.
