Glamorous Transformation: A Listed Company Makes a Big Move into the Crypto Assets Mining Field

Recently, a publicly listed company has released three important announcements consecutively, attracting widespread attention in the industry. The company acquired 32Eh/s of operational crypto mining equipment for $256 million and plans to acquire an additional 18Eh/s of mining machines by issuing $144 million in stock. In addition, the company produced a total of 393 bitcoins in November.

This series of actions marks the company's official transition from the automotive dealership business to self-operated mining. Let's take a closer look at several key points of this transformation:

1. The first batch of 32Eh/s mining machines is distributed across five countries, including the United States, the Middle East, and Africa. These devices are mainly the flagship S19 series from a well-known mining equipment manufacturer, with an expected depreciation period of about 4 years. Notably, the shutdown price for this batch of equipment is approximately $70,000 per unit, which includes the hosting operation costs.

2. The acquisition funds for the second batch of 18Eh/s mining machines will be raised through a targeted issuance method, expected to complete the transaction in March 2025. Interestingly, the target of this targeted issuance is an investment group composed of 9 individuals.

3. The company also signed a supplementary agreement as an incentive for these 9 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 these investors.

4. Despite the recent significant rise in Bitcoin prices, the company had already reached an agreement with the seller when Bitcoin was priced at $60,000-$70,000 per coin. Therefore, this acquisition is essentially conducted at par.

5. After the acquisition is completed, the company plans to further expand its business scope, including diversified operations such as computing power leasing and cloud hosting, to reduce the profit fluctuation risks caused by the volatility of Bitcoin prices.

From an investment perspective, when the company completes the acquisition of the remaining 18Eh/s project in March 2025, its total operational hash rate will reach 50Eh/s, making it likely to become the largest mining company among publicly listed companies in the United States. In comparison, the self-operated hash rates of other well-known mining companies in North America are currently 46Eh/s and 32EH/s, respectively.

According to the industry's commonly used valuation method, calculated at 110 million USD per Eh, the company's valuation after completing the entire acquisition should reach around 5.5 billion USD. Considering the company's current market capitalization of only 720 million USD, this means that its stock price may have an upside potential of 3.9 to 6.6 times.

Overall, the strategic transformation of this company not only demonstrates the foresight of the management but also brings considerable potential returns to investors. However, investors must remain cautious when making decisions, fully considering the high volatility of the crypto assets market and the associated regulatory risks.