Evidently bitcoin dividends are becoming a thing. Digihost Technology (TSXV: DGHI) this morning revealed it intends to undertake a new dividend policy as a result of net income beginning to be generated from its operations. Oddly, the dividend is to be paid in cash or bitcoin.
Payment of the dividend is to be at the election of shareholders in terms of whether the dividend is settled in cash or bitcoin. While it may be the first public crypto miner to announcing such a dividend policy, notably, the company is not the first public issuer to do so. BTCS (NASDAQ: BTCS), a blockchain-tech focused firm, announced at the start of this year that it would be undertaking a similar policy.
“The Board of Directors of Digihost is pleased to announce our decision to become the first public company in the crypto mining space to implement a dividend policy payable in BTC to its shareholders. The Company believes any dividends declared under the policy will illustrate the forward-thinking and creative nature of our management team to deliver benefits to its shareholders, with the remaining 90% of earnings to be reinvested to fund future business requirements and opportunities,” said CEO Michel Amar on the policy announcement.
Seemingly related to the announcement, the firm also indicated that it intends to begin to monetize its bitcoin holdings, so as to fund operating costs and SG&A of the company – effectively ending a HODL strategy that has become prevalent amongst public crypto miners.
This change comes as the company formally announces it has achieved a mining hash rate of 1 EH/s as of today, resulting in expected bitcoin production of 4.25 per day, while its average hashrate for 2022 is expected to come in at 1.5 EH/s after certain production expansions. Total holdings of bitcoin currently sits at 797.47 coins, with the firm producing 75.24 BTC during the month of March. Ethereum holdings meanwhile sit at 1,000.89 ETH.
As for its bitcoin dividend, the company expects to pay out 10% of its net income to shareholders of record sometime in the third quarter, based on H1 2022 results. Further details are expected to be released at the time of the dividend being declared.
The dividend policy announcement follows the company last month announcing a US$250.0 million at-the-market financing, as well as a $13.3 million financing conducted with HC Wainwright.
Digihost Technology last traded at $4.24 on the TSX Venture.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
