Miner Hut 8 said last week that it had raised a total of $ 8,3 million from the sale of a 6% equity stake to investors, about $ 800.000 more than the original $ 7,5 million funding target .
The Toronto-listed mining company says the funding will keep it competitive as smaller miners with older equipment are under pressure from May halving.
Increase the extraction capacity
Overall, investors purchased a total of 5,7 million Hut 8 "units", at $ 1,45 each. Each unit contains a common share of Alberta-based Hut 8, as well as the option to purchase another share over the next 18 months for $ 1,85.
The funding will be invested in new equipment. Ryleigh Ebron, external spokesman for Hut 8, said the company will be able to increase its extraction capacity by over a fifth to 1.150 petahash (PH / s).
Once installed, the company could comprise just under 1% of the total hash rate for the bitcoin blockchain, currently around 115.200 PH / s according to Blockchain.com. The finances of Hut 8 have been the subject of much discussion. It saw a loss of $ 116,6 million in the fourth quarter of 2019 only. The company made a very subtle gain of just over $ 2 million in 2019.
The turning point in Hut 8 actions
The share price says it all: in April 2018, Hut 8 was trading at $ 4,50 CAD (~ $ 3,28 US) but has since grown with ups and downs, hitting a low of $ 0,59 CAD ( US $ 0,43) by mid-March this year.
At the time of this writing, the shares amounted to CAD $ 0,98 (~ US $ 0,72). Hut 8 attributed these poor performances to a deleterious agreement that forced him to buy only equipment from the manufacturer Bitfury, his only major investor.
This prevented him from accessing the faster machines from Bitfury's rivals, leaving him with rapidly aging equipment. In January, Hut 8 changed the deal so that mining equipment could be purchased elsewhere.
Interestingly, Hut 8 has stated that it will use all new funding to purchase mining equipment from Bitfury's rival, MicroBT. Most of the new plants will arrive between July and November.
Hut 8 hopes halving will make it more difficult for some of its competitors, those who operate with older equipment, to stay in the game, Ebron said. He also stressed that the company is in a particularly advantageous position because lower electricity rates in Alberta mean that Hut 8 can improve fluctuations in the volatile price of bitcoins.
Hut 8 was listed on the Toronto Securities Exchange in October 2019. The exchange has already approved the quotation of recently sold stocks, subject to the mining company's listing conditions, which include equity of over $ 7,5 million CAD (~ $ 5,5 million US), such as new mining equipment.
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