Energy-turned Bitcoin mining firm Iris upsizes IPO raise to $231 million

Quick Take

  • Iris Energy has upsized its U.S. IPO to $231 million after raising $115 million in a debt issuance last month.
  • Much of its capital raised may eventually go to Bitmain as it estimates $533 million in remaining commitments for Bitcoin miner pre-orders.

Australia-headquartered Bitcoin mining firm Iris Energy has upsized its initial public offering (IPO) on Nasdaq to $231 million.

The energy-turned Bitcoin mining company said in a statement on Wednesday that the final price for the offering of its 8.26 million ordinary shares has been set at $28 per share. That has exceeded the previously announced price range of between $25 to $27 per share and would value Iris Energy at about $1.5 billion.

The stock trading is expected to begin on Wednesday under the ticker IREN, the firm said.

Iris Energy's listing comes less than a month after Pennsylvania-based energy firm Stronghold Digital raised $127 million in a U.S. IPO. 

Last month, Iris Energy also issued convertibles notes for a total of $115.5 million that bear an annual interest of 12% and mature in October next year, according to its latest IPO prospectus.

It appears that much of the capital Iris Energy has raised through debt and IPO so far will go to the pockets of Bitcoin mining hardware manufacturer Bitmain.

Dropping $533 million on bitcoin miners

To expand its self-mining capacity, which is currently at 0.7 exahashes per second (EH/s) powered by its 30-megawatts facility in British Columbia, Iris Energy has signed large pre-orders for the future stocks of Bitmain's AntMiners S19 series.

The firm has signed contracts with Bitmain and paid initial deposits for roughly 150,000 units of Bitmain's equipment with a whopping total computing power of 14.5 EH/s. That is nearly 10% of Bitcoin's current network hash rate.

Per the IPO prospectus, Bitmain is set to start shipping the equipment batch after batch from October 2021 to September 2023. 

That means Iris Energy is expected to pay for the remaining amount of the pre-orders in installments over the next two years in order to achieve its scaling plan.

"We have estimated remaining commitments (includes shipping and provincial sales tax) totaling $533 million, payable in installments from October 2021 until October 2023, which relates to deliveries commencing in October 2021 and ending in September 2023," the firm said.

Iris Energy does not adopt the so-called "Hodl" strategy that's common among most publicly listed Bitcoin mining firms. Instead, it sells "all the Bitcoin" it has mined and held no digital assets on its balance sheet as of September 30. 

© 2022 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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