Bit Digital Inc (NASDAQ:BTBT) has this week announced a flurry of shifts, which analysts at Noble Capital Markets believe will result in a significant change to the company.
The company outlined a strategic exit from bitcoin mining, a potential IPO of its WhiteFiber subsidiary, and a $150 million equity raise.
Most notable is the company’s pivot into a pure-play Ethereum staking and treasury company.
“Given the economics of bitcoin mining versus Ethereum staking, we see the rationale in the move,” Noble analysts wrote.
Bit Digital has commenced a strategic alternative process for its bitcoin mining operations.
As part of its Ethereum focus, the company is offering 75 million shares at $2 per share, with the potential of another 11.25 million shares to be sold.
“At first glance, we believe an offering may have been better following the determination of the WhiteFiber potential IPO,” Noble commented.
Finally, Bit Digital has submitted a draft registration on Form S-1 for the proposed initial public offering of WhiteFiber, Bit Digital’s subsidiary that includes its HPC colocation and GPU cloud service businesses.
“This move does not come as a surprise, as investors have yet to provide Bit Digital shares with any significant value for this business,” the analysts noted.“While we believe the company has been valued as a basic bitcoin miner rather than the digital infrastructure provider into which it has morphed, we would like to see some additional details of the proposed changes before changing our targets,” they wrote.
The analysts maintained an ‘Outperform’ rating and $5.50 price target on Bit Digital. Shares moved nearly 5.3% higher on Friday at around $2.10.