Iris Energy, a publicly traded sustainable Bitcoin mining company (IREN), has agreed to sell up to $100 million in shares to investment bank B. Riley Financial over the next two years. B. Riley previously agreed with Core Scientific in July that the miners have the option but not the obligation to sell the shares to the investment bank.
Iris Energy (IREN), a bitcoin miner, has decided to sell up to $100 million in shares to B. Riley over the next two years. It is B. Riley’s second large investment in the mining industry, despite the fact that the sector is currently experiencing increased competition and declining revenues due to the bear crypto market.
In July, the bank signed a similar $100 million contract with Core Scientific. These actions demonstrate how, despite obvious disadvantages, some traditional banking institutions remain interested in Bitcoin.
What Do the Fillings Indicate?
Iris has the option but not the obligation to sell the stock to B. Riley. According to the filings with the US Securities and Exchange Commission, the miner may sell up to 25 million ordinary shares of IREN to B. Riley in the 24 months beginning September 23. If the miner sells all of its shares to the bank for around $100 million, B. Riley will own up to 31% of the company.
Iris has the option of issuing and selling up to 24.8 million shares to B. Riley Principal Capital II in exchange for the bank’s commitment to the acquisition, as well as approximately 198,174 common shares.
Iris intends to use any sale proceeds to fund business expansion, including hardware purchases, asset acquisitions, data center facility construction, working capital, and other general corporate objectives.
Mining Companies Suffers
Bitcoin miners benefit from the network’s protection by earning fixed bitcoins for each block mined. Because proof of work mining consumes a lot of energy, Bitcoin has received a lot of criticism for being bad for the environment. This criticism, however, is no longer valid since the Ethereum network switched to proof of stake.
Miners’ profits have fallen in line with the price of Bitcoin in 2022. As a result, mining companies experienced significant Bitcoin selloffs and even went bankrupt. Because the network’s hash rate is increasing, miners must become more cost-efficient in order to compete.
Bitcoin’s price has dropped by up to 60% this year, while energy prices have risen. As a result, the value of publicly traded bitcoin miners’ stocks has declined. Significant mining operations, on the other hand, are making long-term investments. Despite selling more coins that month, Core Scientific added 14,000 ASIC servers in July.
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