The last few years have been pivotal for the cryptocurrency market, as the popularity of top players like Bitcoin rose sharply amid widespread acceptance. The entry of digital currencies into the mainstream has spurred the need for effective technologies like those offered by Rhodium Enterprises, Inc.
$7.7 Mln Shares
The company, which provides advanced technology for Bitcoin mining, this week announced plans to become a public entity through an initial public offering. It is preparing to offer approximately 7.7 million shares at an estimated price between $12 per share and $14 per share. At the mid-point of the price range, the offering would yield around $100 million, valuing the company at $1.7 billion.
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As per an official statement, the management plans to list the stock on the Nasdaq stock exchange under the ticker symbol RHDM, a move that is expected to contribute to the increasing adoption and success of Bitcoin. Riley Securities is the book-running manager.
IPO Proceeds
Funds raised through the offering will be used mainly to repay debt and interest on loans. The remaining amount will be earmarked for expanding the business and for general corporate purposes. It is expected that investments would be focused on acquiring new mining hardware and technologies like liquid-cooling that helps in mining Bitcoin efficiently.
In the nine months ended September 30, 2021, Rhodium generated total revenues of $82.1 million, compared to near-flat revenues in the same period of 2020. The company turned to a net profit of $12.8 million or $0.10 per share during the period, compared to a loss of $0.7 million in the prior year.
The Fort Worth-based digital asset technology company was founded by Chase Blackmon, Cameron Blackmon, and Nathan Nichols, who is leading the company as its chief executive officer. A rapidly growing operator of cryptocurrency mining hardware, the company is looking to become a full-fledged Bitcoin mining platform, leveraging its liquid-cooled computers.
Capacity Expansion
Rhodium is expanding capacity at its Texas facility, targeting a total capacity of about 350 MW by mid-year. The company looks to gain an edge over competitors by leveraging its low-cost Bitcoin mining process and integrated infrastructure platform.
Read management/analysts’ comments on quarterly reports
Meanwhile, the ongoing chip shortage and supply chain issues might affect near-term growth initiatives, which demand a large number of high-performing computers. Also, the crypto industry is facing criticism for the heavy power consumption during the mining process, which represents a very high carbon footprint.