Bitcoin Mining Company Hut 8’s Stock Falls as CEO Steps Down

Share value of Canadian Bitcoin mining company, Hut 8, has fallen as much as 40% since the news that Andrew Kiguel, its Chief Executive Officer (CEO) of Hut 8, would be relinquishing his position as the company’s chief and member of the Board of Directors until a successor is appointed. An official statement released by the company on January 28, 2020, revealed the news. However, the stock value appears to be picking up as of this writing. Operating at roughly 952 Petahashes per Second, Hut 8 is one of the world’s only publicly-traded mining companies and has mined over 12,000 Bitcoin. Under Kiguel’s leadership, the company generated over $110 million in revenue in 2018, though 2019 was a less successful year. BitFury, a hardware manufacturer and technology service company, had been providing Hut 8 with the hardware required for its mining operations. The renegotiated deal with BitFury sees Hut 8 reduce its operating costs, as well as have more control over its operations in Canada.

A Harsher 2019 for Hut 8

While 2018 may have been a successful year for Hut 8, 2019 was a little tougher, as it was for several mining companies. Hut 8’s revenue declined by 5% in Q3 2019 and posted a loss of $8.7 million. Historical annual earnings growth for the past five years also isn’t the most flattering, at -80.7%, though 2019 itself saw a 11.4% growth for the company. [SimplyWallSt] It is also worth mentioning that the company has reduced its debt between 2018 and 2019, from about CA$32.4 million to CA$23.3 million. The renegotiated contract should mitigate the company’s balance sheet and make business operations healthier. [SimplyWallSt]

The Mining Industry Is Experiencing Tough Times

Several mining companies have undergone a difficult two years or so, as Bitcoin’s prices appeared to stagnate in early 2019. Bitmain, which produces the AntMiner mining hardware, also canceled an operation partnership with Texas-based mining farm, DMG Blockchain, citing cost and operational efficiencies as being the reason behind the cancellation. It is also in the midst of controversy for allegedly selling equipment to a Ponzi scheme network, as BeInCrypto has previously reported. Mining profitability has also reduced over the years, which has hit both small-time miners and larger companies.