TL;DR
- TeraWulf sells a 25% stake in Nautilus Cryptomine for $92 million, including $85 million in cash and 30,000 Bitcoin miners, achieving a 3.4x return on investment.
- Funds will be reinvested into AI and HPC data centers at the Lake Mariner facility in New York, with a 20 MW liquid-cooled colocation building expected by Q1 2025.
- The strategic move aligns with industry trends of diversifying into AI to mitigate Bitcoin market volatility, while TeraWulf’s stock surged 8%, reaching a 61% increase year-to-date.
TeraWulf, a leading Bitcoin mining company, has sold its 25% equity interest in the Nautilus Cryptomine joint venture for approximately $92 million. The stake was acquired by a subsidiary of Talen Energy Corporation, TeraWulf’s partner in the venture.
Details of the Transaction
The transaction, which includes $85 million in cash and approximately 30,000 Bitcoin miners and associated equipment valued at $7 million, marks a significant return on investment for TeraWulf.
The company reported a 3.4x return on its initial investment in the Nautilus Cryptomine, located near the Susquehanna nuclear power plant in Pennsylvania.
Focus on AI and HPC Data Centers
TeraWulf plans to reinvest the capital into its Lake Mariner facility in New York, which is designed to host high-performance computing (HPC) and artificial intelligence (AI) data centers.
The company recently completed a 2 MW HPC/AI proof-of-concept project at the Lake Mariner facility and is constructing a 20 MW liquid-cooled colocation building expected to be operational by the first quarter of 2025.
Strategic Rationale
The decision to monetize its stake in the Nautilus mine comes ahead of the expiration of a power contract and ground lease in June 2027. TeraWulf aims to leverage superior cost efficiency and lower expected future energy prices at the Lake Mariner facility.
CEO Paul Prager emphasized that the transaction aligns TeraWulf’s focus and investments with areas of greatest operational efficiency and growth potential. TeraWulf’s shares surged by 8% on Thursday, reaching a closing price of $4.71, marking a remarkable 61% increase since the beginning of the year.
The company now ranks as the sixth-largest publicly traded Bitcoin miner, boasting a market capitalization of $1.8 billion, which translates to about a 7.5% share of the market among its peers.
Industry Trends
TeraWulf’s move reflects a broader trend among bitcoin miners like IREN and Core Scientific, who are diversifying into AI data centers to capture new demand and mitigate bitcoin market volatility. However, some pure-play Bitcoin miners, such as CleanSpark, Marathon, and Riot, continue to focus solely on Bitcoin mining, citing quicker returns on investment.
