Bitcoin miner CleanSpark plunged 10% in after-hours trading on Thursday after the firm amended its at-the-market (ATM) offering agreement to sell up to $800 million of its stock.
CleanSpark initially inked a deal for a $500 million ATM offering with New York investment banking firm H.C. Wainwright & Co on Jan. 5, 2024, where CleanSpark said it may, from time to time, offer and sell shares of its common stock at $0.001 per share, a March 28 SEC filing reveals.
Primary stock dilution is a common strategy for publicly-listed companies to raise additional capital.
CleanSpark isn’t the only Bitcoin miner to enter into an ATM agreement for this reason either — with Riot Platforms and Marathon Digital Holdings, both entering into $750 million ATM agreements last August and October.
With a market capitalization of $4.2 billion, a $800 million stock offering would effectively dilute CLSK shares by 19%.
CLSK started the trading day at $23.20 but is now down 16% to $19.1 in after-hours — which included an 8.2% fall during trading hours, according to Google Finance.
Despite the stock plunge, CLSK is up 95% in 2024 and 685% over the last 12 months.
CleanSpark is one of many Bitcoin miners preparing for the upcoming Bitcoin halving event, expected to occur on April 20, which will see Bitcoin mining rewards reduced from 6.25 BTC ($441,000) to 3.125 BTC ($220,500).
The firm boasts the lowest cost production to mine one Bitcoin post-halving at $26,900, a Jan. 12 CoinShares research report found.
On Feb. 6, Cleanspark said it expects its hash rate to double in the first half of 2024 on the back of a recent agreement to purchase four new mining facilities in Mississippi, worth $19.8 million, which produced an immediate 2.4 exahashes per second (EH/s) for the firm.
It also agreed to buy an additional mining facility in Dalton, Georgia, for $6.9 million, which will produce 0.8 EH/s. However, that facility is under construction and won’t be ready until April 2024.
Cointelegraph reached out to CleanSpark for comment but didn’t receive a response by the time of publication.