Since its listing on September 18, 2017, HIVE Blockchain Technologies Ltd.’s (CVE:HIVE) stock price has more than tripled
SmallCapPower | October 31, 2017: HIVE Blockchain Technologies Ltd. (TSXV:HIVE) announced recently a $30 million bought deal financing to fund its second phase construction of a cryptocurrency mining data centre in Sweden. The first phase of the construction was announced just two days earlier on October 23, 2017. This second phase expansion will grow HIVE’s cryptocurrency mining capacity by over 60%.
Read: HIVE Blockchain Stock Has Momentum, Influential Backers
As per the bought deal financing, the syndicate of underwriters led by GMP Securities L.P. will purchase 10.7 million Units at a price of $2.80 per Unit translating into gross proceeds of $30 million. The Underwriters have been granted an option, exercisable at any time up to 48 hours prior to closing, to purchase up to an additional 1.6 million Units at the offering price. Each Unit will consist of one common share and one common share purchase warrant, with each warrant entitling the holder to purchase one common share at a price of $3.90 for a period of two years. The Offering is expected to close on or about November 14, 2017.
HIVE Blockchain is one of the early entrants to the rapidly-evolving blockchain technology industry and is the only publicly-listed cryptocurrency miner. HIVE has partnership with, and is backed by, Genesis Mining, one of the world’s leading cryptocurrency mining hash rate providers, which owns 30% of the Company. HIVE Blockchain already has two data centres in Iceland, which it acquired from Genesis during the last few months. Both Iceland and Sweden data centres are suited to cryptocurrency mining due to the naturally occurring cold climate and abundant, cheap electricity from renewable sources like geothermal and hydro. Upon completion of the second phase construction of the Sweden data centre, the Company’s hashpower capacity is expected to be based approximately 78% in Sweden and 22% in Iceland.
HIVE Blockchain’s share price declined 9% on the day of the announcement. This type of stock movement is not surprising given the big run-up in HIVE’s share price over the past month or so.
Since its listing on September 18, 2017, HIVE’s stock price has more than tripled to $3.52. We can likely expect more upward movement in this stock as the Sweden data centre construction gets completed in December 2017. Additionally, HIVE Blockchain plans to add one more data centre in the coming months, this could also possibly add to the share value going forward.
Disclosure: Neither the author nor any of the principals at SmallCapPower, or their family members, own shares in the company mentioned above.
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