Core Scientific, one of the largest mining companies in North America, intends to list shares on the Nasdaq exchange. And enter the stock market with the help of a specialized company for targeted mergers and acquisitions (SPAC). Core Scientific has already signed a merger agreement with Power & Digital Infrastructure Acquisition Corp as part of the SPAC deal.
This mechanism consists in the acquisition of a special dummy company, which registered by shareholders on the stock exchange with the aim of the subsequent sale of shares to anyone who wants to circumvent the lengthy IPO procedures.
Under US law, such public company mergers don’t require Core Scientific to provide financial statements, US SEC audits, underwriter fees, etc. The date of trading and a new ticker for the securities has not yet been set. But the capitalization estimate already known.
By this parameter, Core Scientific has surpassed all listed miners. The block of shares starts at $4.3 billion. Thus, the estimated value of the company is 8.8 times higher than its projected revenue in 2021 ($493 million). By comparison, rival businesses – Riot Blockchain and Marathon Digital – have market caps of $2.45 billion and $2.5 billion, respectively.
Trading in shares can increase the company’s capitalization
Considering the company’s plans to increase mining income in 2021 by 8 times, trading in shares can increase the initial capitalization several times.
British miner Argo Blockchain has gained 30% after the official registration of the company’s application with the US Securities Commission. The IPO procedure will take place in the third quarter of this year if the Regulator doesn’t delay the audit.
The share price and ticker have not yet been determined, but investors will be guided by the London Stock Exchange. Where these securities already traded, as well as the current Bitcoin rate. Argo Blockchain will benefit significantly if yesterday’s cryptocurrency rebound turns into a steady growth.
Moreover, a few months ago, Fundstrat’s vice president of strategy for digital assets, Leeor Shimron, said that investing in shares of mining companies turned out to be much more profitable than direct investments in bitcoin. This is due to the fact that tradable exchange-traded funds (ETFs) for Bitcoin not yet approved in the US, so buying shares of mining companies is one of the ways for institutions to enter the cryptocurrency market.
Core Scientific will direct funds to purchase mining equipment
According to a press release, the deal will bring Core Scientific about $ 300 million in revenue. This money will be used to purchase mining equipment and build new infrastructure facilities. The CEO of the company said that about 80,000 ASIC miners installed at the company’s facilities. By the end of 2022, their number expected to reach 300,000.
The blockchain hosting provider emphasized that it intends to further develop its business while maintaining “100% carbon neutrality”.
Under the terms of the agreement, Core Scientific shareholders will receive approximately 89% of the combined structure. The rest of the securities distributed between public shareholders (8%) and its sponsors (2%). The merger expected to complete in Q4 2021.
Core Scientific also announced its upcoming acquisition of Bitcoin mining venture Blockcap. The parties did not disclose the details of the deal.
Recall that in April 2021, Core Scientific entered into an agreement with the Chinese manufacturer of mining equipment Bitmain to purchase 112,800 devices for mining Bitcoin.