1. Sensitivity to Bitcoin Price
2. Energy and Expansion Strategy
3. Diversification and Revenue Streams
4. Interest Rate Environment Impact
5. Expansion and Capital Allocation
Your comments regarding initiating a position in this company\
Thanks
Rick
HUT is a $7.7B company, which about $1.6B in bitcoin on its balance sheet (roughly 20% of its market cap) and HUT mines around $150M to $200M in bitcoin per year, a relatively small amount compared to its market cap. We feel that most of its price action is explained by data center and HPC sentiment, similar to CWRV or NBIS price-action.
HUT has announced plans to develop four new US sites with more than 1,530 MW of additional capacity. It is focusing on key US power markets (Texas, Lousiana, Illinois).
It is now diversifying its revenues away from just bitcoin mining and holding BTC on its balance sheet to HPC servies, colocation of digital infrastructure, and power generation.
Reduced interest rates can help with its capital-intensive expansion.
HUT is allocating capital toward large-scale infrastructure projects, it is using debt financing to do so, which is backed by its bitcoin treasury.
Its momentum and performance have been great, it trades at an expensive valuation given the relatively low HPC revenues, but we think its growth potential is there, and analyst estimates have been trending higher. We would be OK with initiating a position, while being mindful of its strong run-up, its high levels of volatility, and its low revenue base.