Hut 8’s New Subsidiary May Focus on Data Center Hosting
Hut 8's new subsidiary, American Bitcoin Corp., a collaboration with the Trump family, may be spun off to enhance focus on data center hosting. Key points include:
- American Bitcoin will be part of Hut 8's financials but could operate separately.
- This separation would allow Hut 8 to concentrate on high-margin data center hosting revenue.
- Hut 8 aims to secure additional power and expand its hosting capabilities.
- Eric Trump and Donald Trump Jr. will merge their firm, American Data Centers, with American Bitcoin, taking a 20% stake; Hut 8 retains 80% and contributes 61,000 mining machines.
- Core Scientific's partnership with CoreWeave has positively influenced investor sentiment towards bitcoin miners entering artificial intelligence and HPC.
- Hut 8 is expected to experience significant growth in the second half of the year, driven by the BITMAIN Colocation agreement.
- Clear Street assigns a buy rating for Hut 8 with a $23 price target; shares were up over 4% at $12.10.
- KBW has an outperform rating with a $30 price target, highlighting Eric Trump's role as chief strategy officer of American Bitcoin.