Publicly traded Bitcoin mining firm Stronghold may sell itself after latest ‘halving’

Although 2024 started with a boom in Bitcoin prices, the year has not been kind to the miners that power the cryptocurrency, with the “reduce by half” cutting off the rewards distributed to operating computers that process blockchain transactions.

A publicly traded mining company, New York-based Stronghold, is expected to announce in an earnings call today that it is exploring a potential sale of all or part of the company in order to “maximize shareholder value,” according to a press release shared with Fortuna. The company currently has a market value of almost US$40 million.

While many mining companies leverage the existing network to power computers that compete to process blocks of transactions and earn Bitcoin, Stronghold has pioneered a unique model, operating two facilities that burn a waste known as coal waste, which the state of Pennsylvania pays businesses to “catch up.” By generating its own electricity through the process, Stronghold effectively functions as its own power station, describing itself as the “only public, vertically integrated mining company”, with a purported objective of “environmental recovery and remediation”.

Despite the new approach and the rise in Bitcoin prices after January approval of Bitcoin ETFs, the outlook for miners like Stronghold worsened after the April halving. Although some analysts foreseen Although publicly traded companies would have an advantage given rising operating costs, with inefficient operations going offline, mining company stocks have not kept up with Bitcoin’s meteoric rise.

Stronghold shares valued at about $11.25 at the end of 2024 were trading for about $3 on Wednesday. In late December, SEC filings showed that CEO Greg Beard, who owns 10% of the company, sold almost 40,000 shares, although he also bought about 1,000,000 during the previous year.

Stronghold’s press release did not reveal whether its decision to sell is related to halving-related pricing, although Beard did so. to say Kitco News in March that the event “would show that we diverge too quickly – why owning your own power is important.”

“Our value proposition is that if energy is expensive, we can quickly shut down Bitcoin mining data centers because it is not an essential service,” he said.

Instead, the press release attributed the decision to a “valuation shift” when comparing Stronghold’s market value to the valuations of other public Bitcoin mining companies, commercial energy companies, and data centers. In a statement, Beard said its existing capacity could be expanded into Bitcoin mining or advanced computing for AI, as other companies are exploring. A company spokesperson declined to comment further.

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