CleanSpark Stock Slides 13% On 300M Stock-Dilution Possibility: Retail Sentiment Sours

Shares of Bitcoin miner CleanSpark Inc (CLSK) declined over 13% on Tuesday after the company notified in an SEC filing that it is calling for a special meeting of its shareholders in October to increase the number of common stock.

CleanSpark notified its intent to increase the number of shares of common stock authorized for issuance from 300 million shares to 600 million shares.

Both Wall Street and retail investors are disappointed with the development. The sentiment meter has dipped into the ‘bearish’ territory (26/100) from the ‘neutral’ zone, and the move was accompanied by ‘extremely high’ message volume.

CleanSpark’s Stocktwits followers are expressing frustration on the potential dilution of their shares.

Meanwhile, the firm released its bitcoin mining and operations update for August 2024. CleanSpark mined 478 bitcoins during the month compared to 494 in July. The firm reported its month-end operating hash rate at 22.6 EH/second compared to a hash rate of 21.2 EH/s in July, registering an increase of 1.4 EH/second.

CEO Zach Bradford stated that the firm’s fleet upgrade is well underway as it simultaneously prepares for 65 megawatts (MW ) of capacity to be energized during September. “These efforts are expected to result in a meaningful increase in operating hash rate and bitcoin production as we close out our fiscal year,” Bradford said.

The company sold 2.50 bitcoins in August at an average price of approximately $56,729 per bitcoin compared to 2.54 bitcoin sold in July at an average price of approximately $62,070 per bitcoin.

In Wyoming, the company is overseeing the preparation of a second site and expects to complete the closing of the land purchase upon completion of remaining closing conditions. In Tennessee, the firm is currently utilizing approximately 50 MW of infrastructure under a hosting agreement, which will be owned upon completion of the acquisition of GRIID Infrastructure Inc.

CleanSpark said that 80 MW of additional data center capacity is also under construction by GRIID, which will also be owned upon completion of the sites and the closing of the acquisition.

Shares of CleanSpark are down over 13% this year but have more than doubled in the last one year. Compared to this, Bitcoin prices have risen over 30% this year and have gained over 122% in the last one year.

Most notably, CleanSpark stock crossed below its 200-day moving average in early August and is still over 32% away from reaching the mark, which currently stands at $14.