Hut 8’s $7B Deal: A Comedy of Crypto & AI Follies! 🎭💰

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Behold, the Farce Unfolds:

  • Ah, the wise Benchmark analyst, Mark Palmer, doth proclaim that Hut 8’s $7 billion, 15-year Fluidstack lease at River Bend is a grand shift toward institutional-grade digital infrastructure. 🏰✨
  • Google’s payment backstop, a safety net of sorts, could inflate the contract’s worth to a staggering $17.7 billion, quoth Palmer. 🤑💸
  • Palmer, ever the optimist, raiseth his Hut 8 price target to $85 from $78, and with a flourish, reiterates his “buy” rating. 📈🎉

Pray, attend! Wall Street’s jesters at Benchmark declare that Hut 8 (HUT), the bitcoin miner, doth use its River Bend announcement to transform from a crypto-first power owner into a grand institutional-grade digital infrastructure platform. A most ambitious metamorphosis, indeed! 🦋🤹‍♂️

Analyst Mark Palmer, with a wink and a nod, proclaims that the structure, counterparties, and cash-flow quality set HUT’s deal apart from the recent wave of AI data center agreements. He doth reiterate his “buy” rating and lifts his price target to $85 from $77, suggesting a 93% upside from Friday’s close of $44.12. Shares, in a premarket frolic, rise by 2.8% to $45.34. 🎢💹

Last Wednesday, Hut 8 signed a $7 billion, 15-year AI data center lease with Fluidstack for its River Bend data center in Louisiana. Shares, in a fit of joy, gained as much as 20% following the news. 🥳📈

“The transaction combined superior deal economics relative to peer deals, long-dated, investment-grade-backstopped cash flows, and multiple layers of embedded expansion optionality across three counterparties,” Palmer declaimed with a flourish. 🗣️📜

Palmer’s sum-of-the-parts (SOTP) valuation includeth the River Bend lease value, potential future expansion capacity under a right of first offer granted to Fluidstack, Hut 8’s stake in American Bitcoin Corp. (ABTC), and the bitcoin held on its balance sheet as of Sept. 30. A veritable treasure trove! 🧮💎

A key point, says Palmer, is timing. Management, in their wisdom, did not rush to monetize power assets early in the AI infrastructure land grab, but waited for a configuration that met internal return hurdles and strategic criteria. Patience, a virtue indeed! ⏳🧠

He flagged the 15-year payment backstop from Google (GOOG) as a meaningful de-risking feature that, in his view, lowers counterparty risk while allowing Hut 8 to keep full economic ownership without warrants or equity sweeteners that have shown up in other deals. A clever stratagem! 🛡️🤝

The report noted that three five-year renewal options could lift total contract value to about $17.7 billion. A sum fit for a king! 👑💰

Benchmark, in its wisdom, values the initial 245 megawatt (MW) River Bend tranche at roughly $7.6 billion, reflecting contracted cash flows and the scarcity value of AI-ready power supported by an investment-grade backstop. A princely sum, indeed! 💡💸

Rival brokers, not to be outdone, join the chorus: Cantor Fitzgerald raiseth its Hut 8 price target to $72 from $64, while Canaccord lifts its target to $62 from $54. A symphony of optimism! 🎻📈

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2025-12-22 18:37