Bitcoin mining firm Bit Digital disclosed intentions to raise funds of as much as $500 million through an at-the-market offering. This is greater than its existing market capitalization of about $429 million, indicating an ambitious growth strategy on the part of the company’s management team.
Bit Digital will issue and sell shares of common stock from time to time using investment bank H.C. Wainwright & Co. The bank will serve as the sales agent and receive up to 3 percent commission on every share sold in the market.
The company had 203.8 million shares outstanding as of April 28, based on its latest filing submitted on Wednesday. Proceeds from the offering will fund Bit Digital’s growth into high-performance computing and cloud services beyond the traditional business of Bitcoin mining.
The company intends to use the capital to invest in new hardware acquisitions, the growth of its working capital, and the potential acquisition of other companies as per its growth strategy.
Bit Digital has stated that proceeds will be used for general corporate purposes tied to diversifying its core business operations. The offering will provide flexibility in timing and execution since sales of stock will depend on market conditions and internal capital requirements.
Bit Digital Targets Growth Amid Market Shifts
However, the firm has not made available specific sales targets or timelines related to the at-the-market offering facility.
The notice comes at the right moment for the Bitcoin miners who are struggling with financial burdens, as hash prices are still below $50 per PH per second.
In its fourth-quarter earnings report, Bit Digital reported that its fleet hashcost alone reached $44 per PH per second before including additional corporate costs.
Industry-wide, mining companies have been actively seeking capital through equity offerings, debt financing, or convertible notes to maintain operations and explore new technology areas.
Publicly listed mining companies raised over $1.6 billion through equity and $4.6 billion through debt in the fourth quarter of 2024.
Nonetheless, the management at Bit Digital is optimistic that the company’s financial strategy will prepare it to deal with market trends while achieving growth prospects within developing digital infrastructure markets.
