Operations seem largely on track according to CleanSpark's plans. At their 16 EH/s targeted ETH, factoring in difficulty adjustments, I estimate they would mine around ~4000-4250 Bitcoin per quarter, which as of BTC price today is an estimated quarterly revenue of ~$120M on the lower end. In Q2 2023, CleanSpark mined 1,871 bitcoins, more than double the 871 coins mined in the prior year. Adjusted EBITDA was $12.7 million, down from $19.6 million, as margins decreased with their growth investments. The increased loss was due to higher costs as CleanSpark continues scaling their operations. Net loss for Q2 2023 was $18.5 million, compared to a $171,000 loss in the prior year. Bitcoin mining revenue was $42.5 million, showing the vast majority of their revenue is now from Bitcoin mining, as intended. Per Q2 reports, CleanSpark generated $42.5 million in revenue in Q2 2023, up 14% from $37.2 million in the prior year. Let's get back to CleanSpark metrics and data that lead to my recommendation: Revenue and Income SEC regulations may also benefit Bitcoin by driving a shift of value from lesser-known cryptocurrencies and irregulated tokens back into the blue-chip crypto options like Bitcoin. If you compare CleanSpark's recent acquisition to previous acquisitions by other mining companies, it seems to have secured a deal at a great value point, at a time when Bitcoin appears poised for growth, fueled by the potential approval of Bitcoin ETFs from major fund managers like BlackRock ( BLK) and Invesco, this purchase could provide major upside. This had valued 1 EH/s effectively at ~$20 million. Whinstone's facility in Texas had been 700 MW, representing 5-7 EH/s. In October 2021, HIVE Blockchain Technologies ( HIVE) had purchased 30,000 MicroBT Whatsminer's (1 EH/s of power) for $65 million when Bitcoin reached $66,930.Īlso in May 2021, Riot Platforms ( RIOT) had acquired Whinstone US for $80 million when Bitcoin peaked at ~$58,000. This deal effectively valued 1 EH/s at around $250 million. In January 2022, Marathon Digital Holdings ( MARA) had purchased 78,000 of Bitmain's newest S-19j Pro miners for $879 million when Bitcoin was, again, at $49,000. In March 2022, Bit Digital ( BTBT) had announced a $324 million deal to acquire 63,000 miners (2.4 EH/s) from Bitmain when Bitcoin was at $49,000. To further put the value of today's acquisition in perspective: Factoring the mining difficulty and BTC market value changes, it still represents approximately ~30% discount to the deals in 2022. This is at an 80% discount to the price paid per EHS in 2022. In Apr 2023, CleanSpark had announced the acquisition of an estimated 6.3 EHs of Hashpower to be deployed by Sep this year for $144.9 million which represented a $23 million per EH/sec hash power. I've reached out to CleanSpark over email for clarification, while I wait for their response in my analysis I now assume this excludes the mining rigs and the mining rigs deployed on the site will be from the ones it purchased earlier).In either case, this adds close to 1 EH/s of hashrate to CleanSpark's hashing power at a time when the BTC price has crossed $30,000. (Note It is unclear to me whether the mining rigs are included in the mining site given the usage of the word "turnkey" in the news report. On June 21, 2023, CleanSpark announced the acquisition of 2 turnkey mining sites in Georgia which will house over 6,000 S19 XPs and S19J Pro+ miners for $9.3 million. The company's offerings also consist of "intelligent energy monitoring and controls, intelligent microgrid design software, middleware communications protocols for the energy industry, energy system engineering, custom hardware solutions, microgrid installation, energy modeling, management and implementation services, traditional data center services, and software consulting." This, I believe, creates synergies with and complements CLSK's bitcoin mining business. CleanSpark purchases Bitcoin mining equipment and infrastructure to increase its hashrate and expand its mining operations. It develops sustainable infrastructure for Bitcoin mining, which is an essential tool for financial independence and inclusion. The company operates in two segments: Digital Currency Mining and Energy. Click here to find out more »ĬleanSpark ( NASDAQ: CLSK) is a clean Bitcoin mining company that also provides advanced software, controls, and technology solutions to solve modern energy challenges. Active contributors also get free access to SA Premium. It's easy to become a Seeking Alpha contributor and earn money for your best investment ideas. Editor's note: Seeking Alpha is proud to welcome Pranjal Mittal as a new contributor.
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