News today on an additional 160 megawatt project in end-stage negotiations.
This should be great news for the stock, but shareholders or past shareholders are not in the mood to accept forward looking statements. We believe this is a mistake, but it is always human nature. Investors are in a “show me the money” phase at this time, even though it appears Soluna has survived the 2022 issues that were mostly not of Soluna’s making. Keep in mind the adage, “Success is often surviving long enough to achieve it.”
Soluna will have a reverse stock split. The size reversal is not yet determined publicly. It appears one share for each ten shares you own is probable. This event and uncertainty does not help the confidence process. We are also waiting for the “new” business plan with forward financial projections. These two events are expected before July first. Investors are likely to place low confidence in the projections as they have been burned in the stock while management has not been proactive with PR in dealing with company events.
The new business plan will look somewhat like the Dorothy B project. Soluna builds and runs the operation for 51% ownership and the financing partner owns 49% of the project. There will be a return on investment payment to the financing partners before the final sharing arrangement is reached. It is a good plan as Soluna “likely” will not have to sell shares or take on debt to finance a 100% Soluna owned project. It does appear that potential partners value the skill set of Soluna more than shareholders do at this juncture.
I am pretty comfortable with the company. Soluna will survive and “maybe” prosper. How profitable the new business plan will be is “the” big question. Bitcoin price action and Blackrock ETF news helps the overall bitcoin environment a lot. More spot Bitcoin ETF applications came following Blackrock’s application.
From the linked article above: The bottom line: A spot bitcoin ETF will likely not get approved under this administration, but what the applications show is that no one wants to be left out on the off-chance it happens.
- Wisdom Tree, Invesco Follow BlackRock With Spot Bitcoin ETF Applications
- ‘The Great Accumulation’ of Bitcoin has begun”, says Gemini’s Winklevoss – CoinTelegraph 6.21.23
5 Bitcoin ETF applications in 5 days!
Blackrock
Fidelity
Invesco
Wisdom Tree
Valkyrie
The more the better for driving Bitcoin’s price higher. The “BUT,” is that it could still be 200 days before the SEC replies on the Blackstone application for a spot ETF. And perhaps none are approved.
In another LOTM blog sent June 21, we discuss the orchestrated takeover of the crypto market and crypto exchanges. See the link here that speculates on this. We will never get a comment on this from the government, but it appears to be the case.
In the press release below look at the Gigawatt numbers as opposed to Megawatts. There is a lot of room for growth in the Batch Computing Data Center world for SLNH.
Soluna Announces new 166 MW Behind-the-Meter Term Sheet with Renewable Energy Powerhouse
8:00 AM ET 6/20/23 | BusinessWire Article Linked here.
Momentum Continues after the Energization of Project Dorothy
ALBANY, N.Y.–(BUSINESS WIRE)–June 20, 2023–
Soluna Holdings, Inc. (“SHI” or the “Company”), (NASDAQ: SLNH), the parent company of Soluna Computing, Inc. (“SCI”), a developer of green data centers for Bitcoin mining and other intensive computing applications, announced the execution of a 166 MW behind-the-meter term sheet with a new leading renewable energy power partner.
The term sheet comes on the heels of Soluna’s successful energization of Project Dorothy, its flagship data center in Texas. The new project, named Kati, will be co-located at an existing renewable energy site, allowing up to 166 MW of Soluna’s modular data center connectivity. The Company and renewable energy partner are currently working on definitive agreements. The regulatory interconnection process has begun.
Soluna offers complimentary curtailment assessments for Independent Power Producers and has analyzed more than 2 GW of renewable projects in the last six months. In addition to the new Project Kati, Soluna currently has 700 MW of additional pipeline in varying stages in addition to Project Dorothy 2 which is approved for 50 MW of interconnection.
John Belizaire, CEO of Soluna Holdings, said, “Now that Project Dorothy is energized, our customers are able to go on site and see how our highly efficient modular data centers and MaestroOS technology truly make renewable generation assets extract more value. We are excited to begin the development process on Project Kati and will use Project Dorothy as a repeatable blueprint as we develop our pipeline.”
It is hard for me to swallow and suggest buying Soluna shares (common or the Preferred), but I do believe it is a profitable thing to be doing. The 700 megawatts in the pipeline is about 10 times what they currently have energized. Gulp…
In summary:
Solana management needs to rebuild confidence with shareholders. No getting around this. This will take time and a focused effort. In the meantime, positive environment for Bitcoin and better environment for Soluna Holdings (SLNH*) $0.19. The overwhelming number of external problems of 2022 are now in the past. The biggest risk at this point in time is in management’s ability to execute the business plan. Management is now moving with the flow of energy. Last year Management was hit hard with negative emotions and negative industry developments outside their control. Now that energy has reversed. Soluna survived. Better days ahead.
- June 22, ’23 Open Letter to Shareholders linked here
- June 21, ’23 PDF on Soluna’s Business Plan looking forward linked here.
Be aware there is a reverse split that will happen in the next ten days. This does not bother this writer, but it might bother you, so we want you to look before you leap – if you leap.
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Written June 22, 2023, by Tom Linzmeier, for Tom’s LOTM Blog at https://lotm.substack.com/.
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In summary:
Solana management needs to rebuild confidence