Australian green bitcoin miner Iris Energy debuted on Nasdaq Wednesday opening at the $US28 IPO price only to sell off sharply. Trading under the symbol $IREN , which accesses abundant or under-utilized renewable energy to power its operations, fell as much as 22% in its first session and closed down 12.7 % at $US24.45. It didn’t help that Bitcoin prices fell though the day.
Australia’s Iris Energy (IREN) is an Bitcoin mining company primarily powered by renewable energy raised its initial public offering (IPO) pricing to $28 per share from the previous expected range of $25 to $27. The company raised $US231.5m in the IPO on the sale of 8.27 million shares. It started trading on the Nasdaq on Nov. 19 under the ticker symbol IREN.
The company will have about 55 million shares outstanding, valuing the company at around $1.5 billion.
Australian Bitcoin mining company Iris Energy (IREN)
Iris acquired its first site in British Columbia in January 2021, which has approximately 30 MW of capacity and operating hashrate capacity of 0.7EH/s. As of September 30 this year, the company also has conditional and unconditional rights to a number of sites across British Columbia, Texas and the Asia-Pacific, over which it is currently pursuing development activities.
IREN was founded by two ex-Macquarie bankers, brothers Will and Daniel Robert in 2018, both in their 30s who have a 10 per cent shareholding in the company. The company is dependent on the Bitcoin market, and while prices have risen near all-time highs, it remains highly volatile. Iris will use the proceeds from the offering to fund its growth initiatives, including hardware purchases and acquisition and development of data center sites and facilities, as well as for working capital and general corporate purposes.
Bitcoin Risk
The company said it has been mining bitcoin since 2019 and has sold all the bitcoin it mined, bucking the trend of most miners holding onto their coins.
“The group‘s miners are designed specifically to mine bitcoin and its future success will depend in a large part upon the value of bitcoin, and any sustained decline in its value could adversely affect the business and results of operations,” Iris said in its SEC filing.
“Specifically, the revenues from Bitcoin mining operations are predominantly based upon two factors: (i) the number of Bitcoin rewards that are successfully mined and (ii) the value of Bitcoin.
“A significant decline in the market price of Bitcoin, an increase in the difficulty of Bitcoin mining, changes in the regulatory environment and/or adverse changes in other inherent risks would significantly negatively impact the group’s operations. “
According to its prospectus, Iris posted an after-tax loss of $678.7m for the September quarter compared with an after-tax loss of $500,000 for the same period last year.
Street research is expected for 11 companies, and lock-up periods will be expiring for up to 11 companies.
Source: Renaissance Capital Iris Energy
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