What's Going On With Bitcoin Miner Hut 8's Stock?

Bitcoin miner Hut 8 Corp. HUT shares are trading higher Tuesday. The company on Monday announced a $150 million strategic investment to build a next generation AI infrastructure platform.

The Details:

Hut 8 announced Monday it had entered into a definitive agreement with a fund managed by Coatue Management, in which Coatue has agreed to invest $150 million through a convertible note.

The note will have a principal amount of $150 million and bear interest at a rate of 8% per year. It will have an initial term of five years and an option for up to three one-year extension periods. Coatue will have the option to convert the note into Hut 8 common stock with an initial conversion price of $16.395 per share.

Hut 8 shares have gained more than 50% in the past month as other crypto-related stocks struggled alongside Bitcoin BTC/USD.

Several analysts have updated coverage on Hut 8 in the past week: 

• Craig-Hallum maintained its Buy rating on Hut and raised the price target from $12 to $14.
• Benchmark analyst Mark Palmer maintained Hut 8 with a Buy and raised the price target from $12 to $17.
• Needham analyst John Todaro maintained a Buy rating and raised the price target from $13 to $15 Monday. 
• HC Wainwright & Co. analyst Mike Colonnese reiterated his Sell rating and $7.50 price target on Tuesday. 

According to data from Benzinga Pro, Hut shares are trading well-above the stock’s 50-day moving average of $9.27 and more than double the stock's average daily volume has been traded Tuesday. 

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Should I Sell My HUT Stock?

Whether to sell or hold a stock largely depends on an investor's strategy and risk tolerance. Swing traders may sell an outperforming stock to lock in a capital gain, while long-term investors might ride out the turbulence in anticipation of further share price growth.

Similarly, traders willing to minimize losses may sell a stock that falls a certain percentage, while long-term investors may see this as an opportunity to buy more shares at a discounted price.

Shares of Hut 8 have lost 1.59% year to date. This compares to the average annual return of -12.1%, meaning the stock has outperformed its historical averages. Investors can compare a stock's movement to its historical performance to gauge whether this is a normal movement or a potential trading opportunity.

Investors may also consider market dynamics. The Relative Strength Index can be used to indicate whether a stock is overbought or oversold. Hut 8 stock currently has an RSI of 71.01, indicating overbought conditions.

For analysis tools, charting data and access to exclusive stock news, check out Benzinga PRO. Try it for free.

HUT Price Action: According to Benzinga Pro, Hut 8 shares are up 16% at $14.53 at the time of publication Tuesday.

Image: Darwin Laganzon from Pixabay