Shares are down 13% as the capital raise news combines with sharply lower bitcoin prices.Read MoreFeedzy
Digihost (DGHI), a relatively small publicly traded bitcoin miner looking to fund ambitious growth plans, announced Friday an “at-the-market” share offering for up to $250 million.
The company’s market cap was less than $100 million as of Thursday’s close, making a capital raise of $250 million – even over a period of time – a sizable amount. Proceeds will mostly be used to fund growth and development of existing mining operations.
The sale of subordinate voting shares will be underwritten by H.C. Wainwright & Co.
Digihost, which is based in Buffalo, N.Y., earlier this week announced a fully drawn $10 million credit facility, with a one-year term and 7.5% interest rate.
Shares were down 13% on Friday on news of the share offering and as bitcoin’s (BTC) fell 5% to $40,500.
Digihost mined 62.58 bitcoins in January with a hashing rate of about 415 petahash per second. It said at the time it planned to expand its mining power to 3.6 exahash per second (EH/s) by year end, implying a more than 700% increase from the January hashrate.
In comparison, Marathon Digital (MARA), one of the largest publicly traded bitcoin miners, said its current hashrate is about 3.8 EH/s, with plans to expand to 23.3 EH/s by early 2023.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.