(Bloomberg) — Bitcoin miners Hut 8 Mining Corp. and US Bitcoin Corp. are merging in an all-stock deal after a prolonged slump in cryptocurrency prices heaped pressure on the industry.
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The combined company will have a market capitalization of about $990 million, according to a statement on Tuesday. It will have “access to” roughly 825 megawatts of “gross energy” across six sites. US Data Mining Group Inc. is the legal name of US Bitcoin Corp. Shares of Hut 8 fell as much as 11% after the announcement.
Bill Tai will remain chairman of the board, while Jaime Leverton will continue as chief executive officer of the new company, which will be named Hut 8 Corp. and based in the US.
Under the agreement, Toronto-based Hut 8 will implement a five-to-one reverse stock split and US Bitcoin holders will then receive 0.6716 shares of Hut 8 per US Bitcoin share. Existing Hut 8 and US Bitcoin holders will own 50% each of the combined company.
Shares of Hut 8 fell 7.8% to $2.20 as of 2:20 p.m. in New York. They’ve rise about 155% so far this year, after plunging 89% in 2022.
(Updates to include the share price decline in the second paragraph.)
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