Major Transformation Acquisition of Crypto Mining Company, Market Potential Underestimated

A certain publicly listed company in the US recently announced a series of significant measures, marking its strategic shift towards the crypto mining sector. The company plans to acquire 32 Eh/s of operating Bitcoin mining machines for $256 million and intends to issue $144 million in stock for the subsequent acquisition of 18 Eh/s mining machines. In November, the company had produced 393 coins.

The first batch of 32 Eh/s mining machines is distributed across five countries, including the United States, the Middle East, and Africa. The equipment mainly consists of the flagship S19 model from a well-known mining machine manufacturer, with an expected depreciation period of about 4 years. The shutdown price is approximately $70,000 per Bitcoin, which includes the hosting operational costs.

The $144 million in funding required for the second phase of the 18 Eh/s Mining machine acquisition will be raised through a directed issuance to an investment entity consisting of 9 natural persons. The transaction is expected to be completed by March 2025, with the seller being Golden TechGen (GT).

The company also signed a supplementary agreement as an option reward. 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 the aforementioned 9 investors.

Despite the recent sharp rise in Bitcoin prices, the company had already reached an agreement with the seller when Bitcoin was priced at $60,000 to $70,000, so this acquisition is essentially a fair-value acquisition.

After the acquisition is completed, the company will transform from an automotive dealer to a self-operated Mining enterprise. In the future, the company plans to further expand its business scope, including hash power leasing and cloud hosting, to reduce the impact of Bitcoin price fluctuations on the company's profits.

From an investment perspective, after the acquisition of the remaining 18 Eh/s project is completed in March 2025, the company's operating hash rate will reach 50 Eh/s, making it likely to become the largest mining company among publicly listed companies in the United States. Currently, the market value and hash rate comparison of other major mining companies in North America are as follows: one company has a self-operated mining facility with a hash rate of 46 Eh/s and a market value of $7.9 billion; another company has a self-operated mining facility with 32 EH/s and a market value of $3.6 billion.

Considering the company's shutdown price is relatively high, using a more conservative valuation basis of $110 million/Eh, the estimated market value before the completion of the second acquisition is $3.52 billion, which could reach $5.5 billion after the acquisition. Compared to the current market value of only $720 million, the company's stock price is clearly undervalued, with potential future growth ranging from 3.9 times to 6.6 times.