Shares of Greenidge Generation Holdings Inc. (NASDAQ: GREE) soared 30% after investment firm B. Riley initiated its coverage of the bitcoin miner with a buy rating.
B. Riley slapped on a $78 price target, which would represent about 200% upside. As traditional investors ponder their approach to digital assets, shares of mining firms, MicroStrategy and others have served as convenient bitcoin proxies. Bitcoin’s price is up barely 2% in the last 24 hours, making GREE’s surge all the more notable.
B. Riley said Greenidge may reach a hashrate of 3.1 EH/s by the end of 2022 and 6.8 EH/s by the end of 2023 as the mining industry continues to flee China after the country’s latest crypto crackdown.
“We believe that Greenidge can fund this growth with cash on hand, free cash flow, and borrowings,” B. Riley analyst Lucas Pipes wrote in a note. “The low probability of equity dilution is a key differentiation from the peer group.” B. Riley also covers mining firms Marathon Digital (NASDAQ: MARA) and Riot Blockchain (NASDAQ: RIOT).
Pipes said Greenidge’s Dresden, N.Y., site is one of the few bitcoin mining operations that’s not reliant on third-party sources for its electricity needs.
“This vertical integration is a competitive advantage and the main driver of its industry-leading cost position ($22/MWh),” Pipes wrote.
Greenridge earlier this month said it will buy 10,000 crypto mining machines for its planned new facility in Spartanburg, S.C. The upstate New York-based mining firm is purchasing 10,000 S19j Pro bitcoin miners from Bitmain.