Shares of Stronghold Digital Mining, a Bitcoin miner, soared 52% Wednesday in its debut as a public company. Context Therapeutics , a biotech, saw shares gain 2% their first day, and Cyngn, a software provider, fell below its offer price.
The three companies, which listed on the Nasdaq, are the first of the dozen initial public offerings slated for this week.
Another five companies are expected to price their deals later Wednesday and trade Thursday: Portillo’s, a fast-casual restaurant chain; packaged coconut-water provider Vita Coco; Winc, an online wine club; Enfusion, a provider of investment management software; and biotech Ventyx Biosciences.
Stronghold (ticker: SDIG) stock kicked off Wednesday at $27, peaked at $31.90 and closed at $28.90, up $9.90 from its offer price.
Late Tuesday, Stronghold raised nearly $115 million after it boosted the size of its IPO. The company had planned to offer roughly 5.9 million shares but ended up selling 6.7 million shares at $19 each, above its $16-to-$18 price range. B. Riley Securities and Cowen are underwriters on the deal.
The Stronghold IPO benefited from good timing. Bitcoin set a new high Wednesday, shooting up to nearly $67,000. The ProShares Bitcoin Strategy ETF (BITO) debuted Tuesday, finishing higher on the day by 4.9%. “We want to be viewed as an asset for institutional investors. But because we control our own power costs, we have better downside protection,” said Stronghold CFO Ricardo Larroudé.
Stronghold owns and operates a coal-refuse power plant in Venango County, Pa., that converts mining waste that is considered a pollutant into energy and ash. While Stronghold takes the energy, the ash can be used as fertilizer and filler in other reclamation projects, the prospectus for the deal said. “We’re the only one using the power that is generated for Bitcoin mining,” Larroudé told Barron’s.
Stronghold plans to close a purchase of a second plant, located near Nesquehoning, Pa., in the next few days, he said. The company has a letter of intent to acquire a third plant, according to the prospectus.
Stronghold operates about 3,000 computers, known as “miners,” that process the transactions necessary to create Bitcoin. Stronghold expects to use part of its proceeds from the IPO to add another 55,800 miners by the end of 2022, the prospectus said.
It costs Stronghold less than $3,000 to mine one Bitcoin, which is one of the lowest figures in the industry, Larroudé said. Stronghold currently has over $5 million in crypto assets on its balance sheet. When asked how long it takes to produce one Bitcoin, Larroudé said: “Every 10 minutes 6.25 [Bitcoin] are awarded.”
Stronghold’s plans include buying more power plants and continuing to expand its mining fleet, Larroudé said. Mining bitcoin may take a lot of electricity but Stronghold provides its own energy, he said. The plants they are acquiring were put in place to remediate past damage caused by legacy mining, he said. In that way, Stronghold is helping the environment as it produces Bitcoin, he said. “We are pretty proud of that,” Larroudé said.
Greg Beard, the company’s co-chairman and co-CEO, is the former senior partner and head of natural resources at investment firm Apollo Global Management (APO). Beard and William Spence, co-chairman, will own nearly 59% of Stronghold voting power after the IPO.
Context Therapeutics (CNTX) shares rose nearly 6%. The stock opened at $4.44, hit a high of $5.50 and ended at $5.10, up a dime from its offer price.
The biotech was expected to price in August, when it planned to offer 1.5 million shares at $12 to $14, but pushed back the deal. It then raised the size of its IPO to 5 million shares but chopped its price to $5, collecting $25 million. ThinkEquity is the underwriter.
Context is developing drugs focused on breast, ovarian, and endometrial cancers. Its lead product candidate, onapristone extended release or ONA-XR, targets endometrial and breast cancer, according to the prospectus for the offering.
Cyngn’s (CYN) stock fell below its offer price. Shares launched at $8.01, peaked at $8.70 and dropped, closing at $7.40, off by 10 cents from its offer price. This technically makes Cyngn a so-called broken deal in that it failed to deliver the quick gains many IPO investors hope to reap.
Late Tuesday, Cyngn raised about $26.3 million after selling 3.5 million shares at $7.50, the bottom of its $7.50-to-$9.50 range. Aegis Capital Corp is the underwriter.
Cyngn provides autonomous-driving software for industrial and commercial vehicles. The company’s Enterprise Autonomy Suite (EAS), which uses advanced autonomous-driving technology as well as data analytics, fleet management, cloud, and connectivity, is in private beta release. It is targeting 2024 for full- scaled commercialization of EAS, the IPO prospectus said.
Other companies offering autonomous driving software have also come to market. TuSimple (TSP), which is developing software that puts long-haul trucks on the road without a human driver, went public in April and is down about 7% from its $40 IPO price. Rivian, the electric-vehicle truck maker backed by Amazon.com (AMZN) and Ford Motor (F) is expected to set terms for its IPO soon. Rivian’s vehicles offer some autonomous functionality, the prospectus for that deal said.