Stronghold Digital Mining is Pittsburgh’s newest unicorn as it goes public

Pittsburgh just got a new billion-dollar company.

On Wednesday morning, Stronghold Digital Mining began trading for its long-awaited initial public offering on the Nasdaq. After starting the day at $19 per share under the ticker symbol “SDIG” (above the anticipated range of $16 to $18 per share), the price surged over 60% later in the day to a share price as high as $30.67. The company also upped its number of shares in the offer to 6.9 million, giving it an IPO raise of just over $200 million.

That pushed Kennerdell’s Stronghold’s value up to nearly $2 billion, representatives from the company said in an email.

Stronghold, which specializes in alternative energy-powered bitcoin mining, benefitted from a record high value in bitcoin today of over $66,000 — a value in part sparked by the debut of Proshares Bitcoin Strategy ETF.

“To a degree, it was a tremendous leap of faith,” Bill Spence, co-chairman of Stronghold’s board of directors, told Technical.ly. “And I’m just so I’m so happy how it’s played out.” His fellow co-chairman is Greg Beard, who also acts as CEO.

The crux of the company’s business plan comes from local pollution problems from coal mine refuse that Spence experienced throughout his childhood. Stronghold creates energy by taking that refuse and burning it in company power plants, which transfer that energy to bitcoin mining. The company currently has two power plants involved with the business: one in Venango County and another in Carbon County, though the deal on the latter has not yet closed according to the company website.

While the process isn’t carbon dioxide-free, it’s considered an environmentally friendly way to remove the toxic refuse, and Stronghold said it receives Coal Refuse Energy and Reclamation Tax Credits and Pennsylvania Tier II Alternative Credits for its technology.

“The reason I did it is because I grew up on these waste coal sites,” Spence said. “I see what kind of environmental degradation they do to the land, air and the water.”

Beyond the environmental impacts, Spence is also proud of the economic benefits that Stronghold can bring to the Pittsburgh area. So far, the company has around 50 employees, but it indirectly employs even more through workers behind data center construction, coal waste transplant and more that company representatives estimate is in the hundreds. This IPO will not only benefit those employees, but likely create even more jobs: As Stronghold moves forward on the “acquisitions of miners and power generating assets” mentioned in the planned use of proceeds in the company’s S-1 filing, those bitcoin machines and assets will need to be managed by people.

Spence has even more big plans for the company. Once sites are clean and coal refuse-free, he said that Stronghold hopes to build sustainable housing there. He also shared that the company is also “very interested in artificial intelligence.”

In terms of its bitcoin mining capacity, the company outlined plans to expand that, too, in its S-1. Right now, Stronghold has contracts for about 26,150 miners and intends to use new funding from the IPO for the purchase of about 55,800 more.

This IPO comes after another massive public offering this summer from language learning company Duolingo, Pittsburgh’s best-known recent tech success. By the end of this year, multiple autonomous vehicle companies with local offices are expected to go public as well, with Aurora’s SPAC deal set to finalize in early November.

Stronghold’s IPO is particularly significant for the cryptocurrency industry. While several other firms in the field have gone public, the traditional route has been through the faster and less paperwork-heavy SPAC deal. Because of that trend, company representatives shared that Stronghold is the first cryptocurrency firm to go through the IPO process, which often involves more scrutiny and vetting from the SEC. That could come in handy as regulators continue to question the place of cryptocurrency in modern society.

“It’s very important to us that we legitimize this industry, and we move it into the public forum through the front door so that people know that there are professionals and we’re not afraid of regulations and so forth,” said Spence of the IPO route. “Because we wanted this, we believe in this, and we want to see it thrive.”

Sophie Burkholder is a 2021-2022 corps member for Report for America, an initiative of The Groundtruth Project that pairs young journalists with local newsrooms. This position is supported by the Heinz Endowments.