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."
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