TLDR
- Hut 8 plans to develop four new sites across the U.S. with over 1.5 gigawatts of power capacity
- The expansion will more than double the company’s total power capacity to over 2.5 GW across 19 locations
- Stock surged 10% to a seven-month high near $26 per share following the announcement
- Company will finance the projects with up to $2.4 billion in liquidity from various sources including bitcoin holdings
- Investment bank Roth Capital says the move could “materially re-rate the stock”
Hut 8’s stock jumped 10% Tuesday after the bitcoin mining company unveiled plans for a major expansion that will more than double its power capacity. The company hit a seven-month high just below $26 per share.
The mining firm announced it will develop four new sites across the United States. These sites will add more than 1.5 gigawatts of power capacity to its operations.
The expansion will bring Hut 8’s total power capacity to over 2.5 GW across 19 locations. This represents a major scale-up for the energy infrastructure company.
CEO Asher Genoot called the expansion “a defining step in Hut 8’s evolution into one of the largest energy and digital infrastructure platforms in the world.” The company has moved these projects from “exclusivity” to “development” status.
This classification change means Hut 8 has secured land and power deals for the sites. The company is now working on design and commercialization phases.
Financing the Expansion
Hut 8 plans to raise up to $2.4 billion in liquidity to fund the projects. The financing will come from multiple sources across the company’s portfolio.
The company holds 10,000 bitcoin worth roughly $1.1 billion. It plans to borrow against this crypto stash as part of its funding strategy.
Hut 8 also has access to a $200 million revolving credit line. An expanded $130 million facility from Coinbase provides additional capital.
The company recently launched a $1 billion at-the-market equity offering. This gives it another avenue to raise funds as needed.
Data center companies are seeing renewed investor interest lately. Demand for computing power continues to grow as artificial intelligence applications expand.
Google recently took a minority stake in bitcoin miner TeraWulf. That deal was part of a $3.2 billion AI infrastructure agreement.
Analyst Optimism
Investment bank Roth Capital praised Hut 8’s expansion plans. The firm called it a “step-up” that could “materially re-rate the stock.”
Roth expects the stock to benefit as the new sites come online. The facilities will likely be contracted for AI and high-performance computing work.
Canaccord also raised its price target on the stock. The firm cited expected growth from increased capacity and geographic diversification.
Hut 8 stock has gained 2.95% year-to-date despite recent volatility. The company maintains a current market cap of C$3.43 billion.
The stock’s average trading volume is 1.44 million shares. Technical indicators show a “Strong Buy” signal according to analyst data.
Bitcoin prices remain below $110,000, but Hut 8’s stock surge shows investors are focused on the company’s expansion plans rather than crypto price movements.
