Bitcoin miner CleanSpark plans to continue pursuing acquisitions amid bear market

Bitcoin miner CleanSpark ( CLSK ) said it will continue to look for growth through increasing mining acquisitions, as the crypto winter continues to weigh on the industry.

“We don’t feel compelled to go out and have to do M&A, but if we see a good deal, then we will take advantage of it,” Chief Financial Officer Gary Vecchiarelli said on the company’s first-quarter earnings conference call Thursday. He also believes that if bitcoin’s price doesn’t get close to $40,000 heading into the next halving event, there will likely be many smaller miners, especially private companies, who won’t be able to access the capital markets, providing potential opportunities for CleanSpark.

In the recent bear market, as more miners reeled from the drop in bitcoin prices and higher energy costs, CleanSpark took the opportunity to buy up assets and mining machines on the cheap.

“We have been thoughtful and calculated buyers in this market, seeking growth acquisitions and efficiently deploying capital,” Vecchiarelli said in a statement Thursday. “We have successfully sourced and closed transactions that not only increase our percentage of the total global hash rate, but also produce meaningful bitcoin and cash flow while still paying down the small amount of debt we have,” he added.

CleanSpark is looking to fund potential deals by selling mined bitcoins and issuing equity, management said on the earnings conference call. To that end, CEO Zach Bradford said CleanSpark will seek to increase the number of shares authorized for issuance from 100 million to 300 million at its upcoming annual meeting.

Bradford noted that the move does not necessarily mean the company will issue any of the authorized shares, but it will give the company the ability to use equity capital, if necessary, to achieve its targeted growth. “We believe in [increased] shares will give us the flexibility to not only maintain market share, but to significantly increase market share, just as we have done in the past,” he said on the conference call.

In addition, CFO Vecchiarelli said the company is looking to make acquisitions and has several options to do so, including selling bitcoin and equity. “I want to emphasize that we will continue to be methodical and calculated as we raise capital and deploy that capital,” Vecchiarelli said.

The miner expects to reach its year-end hash rate or computing power guidance of 16 exahashes per second (EH/s), according to a results statement Thursday. CleanSpark previously adjusted its 2023 hash rate forecast to 16 EH/s from 22.4 EH/s, citing a delay in the construction of a mining facility by one of its partners, Lancium.

Overall, CleanSpark reported first-quarter revenue of $27.8 million versus the average analyst estimate of $29.5 million, according to FactSet data. Shares of the miner fell about 4.3% after trading on Thursday, while bitcoin fell 4.6% in the past 24 hours.