Bitfarms Ltd (NASDAQ:BITF) stock is down 16% following mixed Q2 results released with the new share offering announcement. The company reported its Q2 earnings on August 16 after market close, delivering sales that beat market expectations.
However, the loss was wider than anticipated because of the re-evaluation of Bitfarms’ BTC holdings. For the second quarter the company had sales of $36.7 million which topped analysts’ estimates of $22.7 million, but the net loss was $3.68 million in line with Q2 2020’s loss. As a result, the company management announced that it is considering a major new share offering.
It seems there was an adverse reaction from investors because of the company’s plan to issue a new at-the-market share offering leading to the share drop. The company said it signed an agreement with H.C. Wainwright to offer shares to raise around $500 million in gross proceeds. Management plans to use the capital in paying down debt, making acquisitions, and funding operations. With the share offering, BITF is worth watching in the coming months.
Market Reaction:
On Tuesday, BITF stock slumped 15% at $5.43 with more than 9.14 million shares, compared to its average volume of 3.03 million shares. The stock has moved within a range of $5.35 – 6.30 after opening the trade at $6.01.
