Shares of a small cloud-based software penny stock were rallying Monday after the announcement of a merger with a Bitcoin miner.
The Merger: Greenidge Generation Holdings and Support.com SPRT announced a merger Monday morning.
Shareholders of Support.com will own 8% of the newly formed company. The merger is expected to close in the third quarter of 2021.
The deal is expected to create the first publicly traded Bitcoin BTC/USD mining company with a wholly owned power plant.
About Greenidge Generation Holdings: The company has 19MW of mining capacity today with plans to hit 500MW by the year 2025.
The company’s environmentally sound 106MW natural gas plant powers 19MW of mining capacity for the company currently.
Greenidge is vertically integrated with its own power plant and has plans to replicate this model at other sites to hit its goal of 500MW mining capacity by the year 2025.
The company owns its power generation assets and said it operates its own mining equipment, unlike some peers.
In the 12-month period ending Feb. 28, Greenidge Generation mined 1,186 Bitcoins at a net variable cost of $2,869 each.
Related Link: Bitcoin Play Cipher Mining To Go Public With SPAC Merger
Competition: Greenidge Generation Holdings has an exahash rate of 1.1 per second. The company expects its EH/S rate to grow to 2.6 EH/S in 2022.
The company’s 1.1 rate is similar to competitors in the space including Riot Blockchain RIOT with 1.1, Marathon Digital Holdings MARA at 1.4, HIVE Blockchain Technologies HVBTF at 0.2 and Hut 8 Mining HUTMF and Bitfarm at 1.3.
Greenidge said it has the lowest cost of power of the companies mentioned in the investor presentation.
Financials: Greenidge Generation sees EBITDA hitting $50 million in 2021.
The company is estimating revenue to hit $78 million in fiscal 2021 and $145 million in fiscal 2022.
Financial assumptions are based on a Bitcoin price of $49,000.
Price Action: Shares of Support.com were up 232.71% at $7.12 at last check Monday.
Bitcoin was trading at $57,179 at the time of writing.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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