Crypto mining company completes major acquisition, business transformation draws follow

Recently, a publicly listed company announced a series of important announcements, which attracted widespread attention in the market. The company acquired 32Eh/s of operational crypto mining equipment for $256 million. At the same time, the company also plans to raise an additional 18Eh/s of operational mining equipment by issuing $144 million in stock. It is worth mentioning that the company's Bitcoin output in November reached 393 coins.

This acquisition is of great significance to the company. The first batch of 32Eh/s Mining equipment is distributed across five countries, including the United States, the Middle East, and Africa, mainly using flagship mining machines from a well-known brand. The depreciation cycle of these devices is about 4 years, and the shutdown price is around $70,000 per coin (including hosting and operational costs).

The acquisition funds for the 18Eh/s devices in the second phase will be raised through a targeted issuance method, primarily aimed at a group of 9 individual investors. This transaction is expected to be completed in March 2025, with the seller of the devices being a company named Golden TechGen.

The company has also signed a supplemental agreement as an incentive for investors. If the company's market value reaches a specific level for 30 consecutive trading days within the next 30 months, it will issue additional shares worth $97.1055 million to the aforementioned investment group.

Despite the recent surge in Bitcoin prices, the company had already reached an agreement with the project party when Bitcoin was priced between $60,000 and $70,000, so this acquisition was essentially carried out at par.

This acquisition marks a shift in the company's business focus, from its original automotive dealership to self-operated crypto mining. In the future, the company plans to expand into diversified businesses such as computing power leasing and cloud hosting based on this foundation, in order to reduce the impact of Bitcoin price fluctuations on the company's profits.

From an investment perspective, after the completion of the remaining 18Eh/s project acquisition in March 2025, the company's operating hash rate will reach 50Eh/s, making it likely to become the largest mining company among publicly listed companies in the United States. Currently, the market value to hash rate ratio of other major mining companies in North America is between $110 million and $170 million/Eh. Considering the company's relatively high shutdown price, we can conservatively use $110 million/Eh as the valuation benchmark.

According to this calculation, before the completion of the second round of acquisition, the company's reasonable market value is approximately $3.52 billion; after the acquisition is completed, the market value may reach $5.5 billion. Compared to the company's current market value of only $720 million, this means that the company's stock price may have an upward potential of 3.9 times to 6.6 times. This indicates that the company's current market value may be severely underestimated.