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 annual revenue growth of 167%, announced the purchase of a new location 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 estimate. The purchase, which closed on Sunday, is part of the company’s broader strategy to increase data center capacity to 32 MW by 2025.
The site, known as MTL2, was purchased for CAD 33.5 million (approximately US$23.3 million) and is a 160,000 square foot facility previously used as a capsule manufacturing plant. Bit Digital plans to invest approximately CAD 27.6 million (approximately USD 19.3 million) to upgrade the facility to Tier-3 data center standards with an initial capacity of 5 MW, which is expected to be operational by May 2025.
Bit Digital CEO Sam Tabar said the strategic location and existing infrastructure of the site will allow the company to reduce development costs and accelerate the launch of the center. 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 plant will also use 100% renewable hydroelectric power from Hydro-Quebec and has the potential for future expansion.
The company financed the acquisition with cash and is in the process of securing mortgage financing for the purchase of the property and subsequent infrastructure capital expenditures. InvestingPro data shows that 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 feature a new generation of Nvidia (NASDAQ: ) GPUs to meet the demands of the new customer.
Investors are cautioned that investing in the securities of Bit Digital involves risks, as detailed in the company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2023. InvestingPro the data indicates high volatility for the stock with a beta of 4.83, indicating significant price movements compared to the broader market. InvestingPro subscribers have access to 12 additional key insights into Bit Digital’s financial health and market performance. The Company does not operate in the People’s Republic of China (PRC) as of September 30, 2021, but acknowledges the potential risks associated with its previous operations in the country.
This expansion underscores Bit Digital’s commitment to increasing its data center footprint while emphasizing energy efficiency and sustainability. The information for this article is based on a press release from Bit Digital, Inc.
In other recent news, MicroStrategy and other companies with significant exposure to cryptocurrencies have seen trading decline, reacting to the Federal Reserve’s recent signals of interest rate caution and significant currency depreciation. This caused a ripple effect, affecting stocks related to digital currencies. B. Riley Financial has updated its stock price targets for several digital mining companies, maintaining a ‘Buy’ rating, in response to the recent rally in Bitcoin prices. Bit Digital Inc. reported a decline in sales in the third quarter, attributed to the impact of the Bitcoin halving event on the company’s mining operations. However, the HPC (High-Performance Computing) segment has seen significant progress. Bit Digital also released its financials for October, including revenue from digital asset production and HPC services, along with an update on its cryptocurrency holdings and liquidity. Furthermore, Bit Digital announced the execution of a Master Service Agreement (MSA) with Boosteroid, a global cloud gaming provider. These are recent developments in the company’s operations.
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