- Support.com shares jump as much as 283% early Monday following an all-stock merger agreement.
- The technical services provider will take bitcoin miner Greenidge Generation public.
- Support.com will become a Greenidge subsidiary in a deal slated to close in the third quarter.
- See more stories on Insider’s business page.
Support.com stock soared early Monday following a merger agreement under which the business and consumer technical services provider will take bitcoin miner Greenidge Generation public in a stock-for-stock transaction. Shares were up as much as 283% shortly after the opening bell.
Greenidge in a statement Monday said it expects to be the first publicly traded bitcoin mining company with a wholly-owned power plant. When the deal is completed, Support.com’s stock holders and option holders will collectively own about 8% of Greenidge’s outstanding Class A common stock.
Support.com, which will become a subsidiary of Greenidge, is expected to provide about $33 million to Greenidge, with the deal conditioned upon Support.com having at least $28 million in cash on its balance sheet at closing. The pro forma combined company is expected to have net cash of at least $70 million.
The deal, aimed at bringing Greenidge to the Nasdaq exchange, is expected to close in the third quarter of 2021.
Greenidge runs a 106 megawatts natural gas plant in upstate New York that powers 19 MW of mining capacity. That capacity is expected to more than double to 41 MW by the end of the second quarter of 2021 and to reach 85 MW by the end of 2022. Greenidge said it mined 1,186 bitcoins at a net variable cost of about $2,869 per bitcoin for the twelve months ended February 28.
Greenidge foresees calendar year 2021 EBITDA of more than $50 million.
The transaction “represents a significant value proposition for our shareholders by providing them with enhanced liquidity and the opportunity to participate in the growth of what we believe will be a successful competitor in the rapidly evolving domestic bitcoin mining space,” said Lance Rosenzweig, chief executive of Support.com, in the statement.
So far this year, Support.com shares had lost 2.8% but had more than doubled from about $1 each over the past 12 months.