Iris Energy plans to raise AU$223M through IPO

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Iris Energy plans to raise AU$223M through IPO

IPO, Iris Energy, Bitcoin Mining, ASX, NASDAQ
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Highlights

  • Bitcoin mining company Iris Energy plans to sell around 8.3 million shares at AU$25 to AU$27 each.
  • The Sydney based company will list its shares on Nasdaq listing under the ticker ‘IREN’.
  • The net proceeds will be used to buy bitcoin mining hardware equipment and fund the company's growth initiative.

Iris Energy, a bitcoin mining company, announced to raise approximately AU$223 million through its initial public offering (IPO). According to a regulatory filing with the US Securities and Exchange Commission (SEC), the company plans to sell around 8.3 million shares at AU$25 to AU$27 each.

Suggested reading: IPOs today: How Revolver Resources, IRIS Metals performed on ASX debut

Iris Energy Australia stated that with the AU$26 as the mid-price range, the net proceeds should be approximately AU$196 million. If the underwriters exercise the option to purchase an additional 1.24 million shares, then the net proceeds can reach the value of AU$226 million.

The Sydney-based miner added that in the high-end price range of AU$27, the market capitalisation would reach the value of AU$1.53 million after the assumption that overallotment options are exercised. Also, after the IPO, Iris will have approximately 56.7 million outstanding shares.

Cantor Fitzgerald, Cowen, Macquarie Capital, Canaccord Genuity, CLSA, Citigroup and JPMorgan are acting as the bookrunners for the IPO.

How will Iris Energy use funds?

The net proceeds will be used to fund the growth initiative of the company. It includes buying bitcoin mining hardware, developing data centres or acquiring data centres.

The growth plan of the company includes achieving the targeted 1GW of power for the hashrate capacity of 15.2EH/s. Chiefly, the company want to have approximately 10% of the total hashrate of the Bitcoin network. Hashrate stands for the computational power of a cryptocurrency miner.

Bitcoins are being mined by Iris energy since 2019, but the third quarter did not report any balance as all the mined coins were liquidated. For the quarter ended 30 September this year, the quarterly revenue of the company stood at AU$10.4 million, up from just AU$800,000 year-on-year.

Related article: IRIS (ASX:IR1) lists on the ASX after A$7 million IPO

The filing also highlights the plan of Iris energy to enter into the cheap, plentiful and attractive renewable energy sources. Last year, the company bought its first site in British Columbia. This location is connected to the BC Hydro power transmission network, where, as of this year, 98 percent of the electricity was sourced from renewable or clean sources.

Bottom Line

Successful IPO of a sustainable bitcoin mining company will bring in vast growth opportunities for the company, and Iris Energy has identified ample growth opportunities. So, it will be interesting to see how things go for Iris Energy.

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