Stronghold Digital Mining looking to grow after IPO
Updated
The heavy lifting begins for Stronghold Digital Mining.
The first bitcoin miner to go public is looking to grow after a hugely successful initial public offering (IPO) that saw its share price skyrocket more than 65% on Wednesday 20 October, its first day of trading on the Nasdaq Global Market.
Stronghold raised $127m (£92m) by setting shares prices at $19. Shares rose to $31.90 and are currently trading above $25.
The upsized IPO’s timing was great. The launch came the same day that Bitcoin surpassed $66,000 per unit for the first time and a day after the first bitcoin-linked US exchange-traded fund, ProShares Bitcoin Strategy, debuted in New York.
But it’s time for Stronghold to move on, says co-founder, president and CEO Greg Beard.
Celebration short-lived
“I think the celebration lasted about 30 minutes,” said Beard in an interview Friday 22 October with Capital.com.
Stronghold is “super-proud” to be the first bitcoin miner to go public, he added, but the company now wants to press forward with its aggressive expansion plans.
Stronghold bills itself as an environmental-reclamation company first and a bitcoin miner second. The firm will use its bitcoin revenue to fund coal-refuse power facilities in Pennsylvania and, possibly, elsewhere.
The company currently operates one coal-refuse power plant, known as Scrubgrass, in Kennerdell, Pennsylvania, where it plans to have 15,000 bitcoin miners operating by year-end 2021. Stronghold is also developing two other coal-refuse power and bitcoin mining facilities in the state.
The New York-based company has not closed the purchases on either of the two other plants, but is behaving as if it already owns them, said Beard, having spent millions of dollars on bitcoin mining equipment for both.
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Second deal due to close
The purchase of the second plant, known as Panther Creek in Nesquehoning, will close in coming days and the facility will resume supplying power to the Pennsylvania electrical grid on Monday 25 October, said Beard. Panther Creek’s data centre will commence operations in November. Beard said Stronghold held off on closing the deal until after the IPO; otherwise, an extra regulatory filing with the US Securities and Exchange Commission would have been required, posing a months-long delay in completion.
“Particularly with supply-chain constraints around the world, you have to be early, be aggressive, and so that's what we've done,” said Beard.
Stronghold has not disclosed the location of the third plant that it is slated to own.
Since the IPO, Beard and co-founder Bill Spence have received hundreds of emails, including some from private players looking to form a partnership with the company. Beard said Stronghold will evaluate potential mergers and acquisitions, suggesting that some are likely.
Taking a traditional route
The company is also looking to develop more coal-refuse power and bitcoin-mining facilities in Pennsylvania and, possibly elsewhere.
“One of the reasons we're proud of what we did, taking a traditional route with the IPO, is we legitimise bitcoin,” added Bill Spence, the company’s other co-founder. “Part of the issue with bitcoin is, just, people look at it with a little scepticism. So we try to establish a good foundation and I think that ties into the answer that (Beard) gave (on the successful IPO.)
“Believe me, we’re thrilled. (But) we both feel an obligation to those people who invested in – believe in – us to deliver the finished product and really execute on our plan.”
Spence, the former owner-operator of the Scrubgrass plant and owner of another nearby coal-refuse power facility, said Stronghold has tried to offset its supply-chain issues by reducing variables beyond its control. For example, the company developed its own bitcoin-miner storage containers.
“I think we have one of the best systems say out there as far as housing the miners and it was designed by us and built by us,” said Spence. “So we actually try our best to control as much of the infrastructure as we can.
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