By Svea Herbst-Bayliss
NEW YORK, Oct 20 (Reuters) – Hedge fund Sachem Head Capital Management said on Tuesday it believes Ionic Digital’s stock price can more than double as the former bitcoin miner shifts into digital infrastructure leasing, amid exploding demand for data center power.
Ionic was formed out of the bankruptcy restructuring of crypto lender Celsius Network and started trading in July on the Nasdaq stock exchange, where shares are worth around $63.
But there is room for the share price to surge to $151 a share, gaining nearly 140%, Sachem Head founder Scott Ferguson said at the 13D Monitor Active-Passive Investor Summit in New York.
Sachem Head, along with Oaktree Capital Management and Attestor Capital, participated in a $400 million private placement in June and owns nearly 10% of the company.
Sachem Head owns roughly 9.9% of Ionic and Ferguson said the firm will make a regulatory filing to detail its ownership with the Securities and Exchange Commission on Wednesday.
Ionic already holds a 10-year triple-net lease in Texas’ Ward County with a possible 10 year extension with Nscale, a London-based, vertically integrated AI infrastructure and neocloud company that operates high-density GPU (Graphics Processing Unit) data centers and cloud platforms.
Microsoft is the end customer for this site, Ferguson said.
An expansion in Ward County and sites in Midland, Texas would help the stock price gain further, he said.
“We think management is pretty good,” Ferguson said, adding however that his firm, which from time to time pushes target companies to make changes, may become more involved at the company.
(Reporting by Svea Herbst-Bayliss; Editing by Jonathan Spicer)
