A change in mining economics causes Greenidge to reconsider its expansion plans.
Although there is much to be excited for in the Bitcoin mining sector — such as mining with flared natural gas
— it's not all milk and honey in the land of miners.
Greenidge Generation Holdings (GREE), a mining company based in New York and South Carolina, fell short of analyst estimates of $34 million for its second-quarter revenue. It clocked in only $31.3 million in revenue, causing a 9.5% drop in share prices in after-hours trading.
Although Greenidge almost doubled the Bitcoin produced in Q2 2022 year-on-year (621 compared to 315), the 60% price drop compared to last year did leave its mark on the company. CEO Jeff Kirt said in a press release
"The sudden change in mining economics has driven us to refocus our strategy to prudently prioritize liquidity and capital preservation over aggressive growth – while maintaining our relentless focus on operational performance.”
In particular, the company is halting expansion plans into Texas. It will instead focus on existing sites in New York and South Carolina.
Moreover, Greenidge reported $107.9 million in net losses in the second quarter. The bulk of that was due to a $71.5 million nonrecurring, non-cash charge.
Still, Greenidge expects to increase its hashrate from the current 2.5 EH/s to 3.6 EH/s by the first quarter of 2023. Additional growth, however, will only happen when "market conditions are attractive."
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators.
This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice.
The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
CoinMarketCap is not responsible for the success or authenticity of any project, we aim to act as a neutral informational resource for end-users.