Hut 8 to Spin Out Bitcoin Mining Operations into American Bitcoin
Hut 8 (HUT) plans to transfer most of its bitcoin (BTC) mining operations to American Bitcoin (ABTC) within a week. This move could lead to a re-rating of the company's shares, according to Benchmark analyst Mark Palmer.
Key developments include:
- Plans to develop 1.53 gigawatts (GW) of new capacity across four U.S. sites in Louisiana, Texas, and Illinois.
- This expansion will more than double Hut 8's power under management to 2.55 GW.
- Palmer raised Hut 8's price target from $33 to $36, indicating nearly 40% upside from a recent close of just below $26.
- The company has secured land and power agreements and is building infrastructure while negotiating with potential customers.
- The separation into ABTC aims to position Hut 8 as an energy infrastructure entity, improving access to financing by reducing exposure to bitcoin revenue volatility.
- Hut 8 has up to $2.4 billion in liquidity for expansion, including $1.2 billion in bitcoin assets, $330 million in credit facilities, and a $1 billion equity program.
Hut 8 represents a strategic investment opportunity in both bitcoin and the AI/high-performance computing sectors.