Bitcoin Miner Stronghold Digital Issues a 2022 Warning. The Stock Is Sinking.
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A technician inspects the backside of bitcoin mining at Bitfarms in Saint Hyacinthe, Quebec
Lars Hagberg /AFP via Getty Images
Shares of Bitcoin miner
Stronghold Digital
were down more than 30% in premarket trading Wednesday after posting a revenue miss for its fiscal fourth-quarter and a 2022 outlook warning.
Revenue for the quarter rose to $17 million, up from $900,000 last year, but fell short of estimates of $21.9 million, according to
FactSet
.
The company reported an adjusted loss of 52 cents a share for the quarter, compared with analysts’ estimates for 0 cents a share, according to FactSet.
Co-Chairman and CEO Greg Beard said in a news release the company has faced significant challenges. Beard said he no longer thinks targeting 8 exahashes per second (EH/s), or overall computing power, by the end of 2022 is achievable. The company revised its year-end target to 4.1 EH/s. Miners with more hashing capacity are able to capture more of the Bitcoins that are allocated as payments for validating transaction blocks on the network.
For the fourth quarter of 2021, Stronghold Digital (ticker: SDIG) averaged a hash rate of approximately 0.3 EH/s. The Company estimates it will average a hash rate of approximately 0.9 EH/s for the first quarter of 2022.
The stock is down 20% year to date.
Write to Logan Moore at logan.moore@barrons.com.
