NEW YORK – Bit Digital, Inc. (NASDAQ: BTBT), a New York-based company specializing in high-performance computing infrastructure and digital asset production, with a market capitalization of $469.57 million and impressive year-over-year revenue growth of 167%, has announced the acquisition of a new site in Montreal, Canada, to expand its data center operations. According to InvestingPro analysis, the company appears to be slightly undervalued based on its Fair Value assessment. The purchase, which closed on Sunday, is part of the company’s broader strategy to increase its data center capacity to 32MW by 2025.
The site, known as MTL2, was acquired for CAD $33.5 million (approximately USD $23.3 million) and is a 160,000 square-foot facility previously used as an encapsulation manufacturing plant. Bit Digital plans to invest around CAD $27.6 million (approx. USD $19.3 million) to upgrade the facility to Tier-3 data center standards with an initial 5MW power capacity, expected to be operational by May 2025.
Bit Digital’s CEO, Sam Tabar, stated that the strategic location and existing infrastructure of the site would allow the company to reduce development costs and expedite the center’s launch. The company aims to equip the site with advanced cooling technology, including direct-to-chip liquid cooling, to support AI and other high-performance workloads. The facility will also utilize 100% renewable hydroelectricity from Hydro-Quebec and has the potential for future expansion.
The company funded the acquisition with cash on hand and is in the process of securing mortgage financing for both the property purchase and subsequent infrastructure capital expenditures. InvestingPro data shows Bit Digital maintains a strong financial position with a healthy current ratio of 5.27 and minimal leverage, with a debt-to-equity ratio of just 0.04. The new data center is expected to house new generation Nvidia (NASDAQ:NVDA) GPUs to meet the demands of a new customer.
Investors are cautioned that investing in Bit Digital’s securities involves risks, as detailed in the company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2023. InvestingPro data indicates the stock’s high volatility with a beta of 4.83, suggesting significant price movements compared to the broader market. InvestingPro subscribers have access to 12 additional key insights about Bit Digital’s financial health and market performance. The company has not operated in the People’s Republic of China (PRC) since September 30, 2021, but acknowledges potential risks related to its former operations in the country.
This expansion underscores Bit Digital’s commitment to growing its data center footprint while emphasizing energy efficiency and sustainability. The information for this article is based on a press release statement from Bit Digital, Inc.
In other recent news, MicroStrategy and other companies with significant cryptocurrency exposure experienced a downturn in trading, reacting to the Federal Reserve’s recent signals of interest rate caution and a significant pullback in Bitcoin’s value. This has caused a ripple effect, impacting stocks associated with digital currencies. B. Riley Financial updated its stock price targets for several digital mining companies, maintaining a ’Buy’ rating, in response to the recent surge in Bitcoin prices. Bit Digital Inc. reported a decrease in sales for the third quarter, attributed to the impact of the Bitcoin halving event on the company’s mining operations. However, the company’s High-Performance Computing (HPC) segment experienced a significant boost. Bit Digital also disclosed its October financial figures, including revenue from digital asset production and HPC services, along with updates on its cryptocurrency holdings and liquidity. Furthermore, Bit Digital has announced the execution of a Master Service Agreement (MSA) with Boosteroid, a global cloud gaming provider. These are the recent developments in the companies’ operations.
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