Booming Bitcoin opens up expansion opportunities for Hut 8
By COLLIN GALLANT on January 26, 2021.
cgallant@medicinehatnews.com@CollinGallant Cryptocurrency miner Hut 8 has secured upward of C$90 million in financing this month for potential expansion as the price of Bitcoin rides high to start 2021. The firm that has its main data-processing centre in Medicine Hat brought in C$77.5 million in a stock offering in mid January that it will use for general corporate purposes and potential expansion activity, according to a prospectus. A second financing deal, announced Jan 22, will see the company able to acquire new hardware with a US$11.8 million loan through U.S.-based sector financing company Foundry Digital. That 12-month term comes with a 16.5 per cent annual interest rate. The new hardware units, known as Whatsminer M30S machines, will add processing capacity over the next six months. Hut 8 said in a release that the agreement helps avoid long lead time in ordering due to Foundry’s relationship with the supplier, MicroBT. The first units will be operating before the end of January, Hut 8 officials stated. The price of Bitcoin reached as high as C$51,700 earlier this month, but has since seen major swings. It fell by as much as $13,000, or 20 per cent, over two weeks, but has since rebounded to sit at about C$41,000 on Monday. The stock offering involved 15.5 million shares offered at $5.00, each coupled with one warrant priced at $6.25 and exercisable over the next two years. Hut 8 stock spiked briefly to an all-time high of $8.46 on Jan. 8 after spending most of the last two years in the $1 to $1.50 range. It opened Monday’s trading at $5.59. 11-10
