CleanSpark, a Bitcoin miner, experiences a 10% drop in stock value following an $800 million share offering.

CleanSpark, a Bitcoin miner, experienced a significant drop of 10% in after-hours trading on Thursday. This occurred after the company amended its agreement with H.C. Wainwright & Co. to sell up to $800 million of its stock through an at-the-market (ATM) offering. Initially, CleanSpark had signed a deal for a $500 million ATM offering with H.C. Wainwright & Co. on January 5, 2024. As per a filing with the SEC on March 28, CleanSpark stated that it may offer and sell shares of its common stock at $0.001 per share from time to time. This move to dilute primary stock is a common strategy used by publicly-listed companies to raise additional capital. It is worth noting that CleanSpark is not the only Bitcoin miner to enter into an ATM agreement for this purpose. Riot Platforms and Marathon Digital Holdings also entered into $750 million ATM agreements in August and October of last year. The potential $800 million stock offering would effectively dilute CleanSpark’s shares by 19%, given its current market capitalization of $4.2 billion. CleanSpark’s stock price started the trading day at $23.20 but dropped by 16% to $19.1 in after-hours trading, including an 8.2% fall during trading hours, according to Google Finance. Despite this drop, CleanSpark’s stock has seen impressive gains of 95% in 2024 and 685% over the last 12 months. CleanSpark is among several Bitcoin miners preparing for the upcoming Bitcoin halving event, expected to take place on April 20. This event will reduce Bitcoin mining rewards from 6.25 BTC ($441,000) to 3.125 BTC ($220,500). A research report by CoinShares on January 12 found that CleanSpark has the lowest cost production to mine one Bitcoin post-halving, at $26,900. The company has also announced its expectation to double its hash rate in the first half of 2024. This follows a recent agreement to purchase four new mining facilities in Mississippi worth $19.8 million, which immediately produced a hash rate of 2.4 exahashes per second (EH/s) for CleanSpark. Additionally, CleanSpark has agreed to acquire another mining facility in Dalton, Georgia, for $6.9 million, which will add 0.8 EH/s. However, this facility is still under construction and will not be ready until April 2024.