NEW YORK: Sachem Head Capital Management LP sees Ionic Digital Inc. (Nasdaq: IOND) shares reaching $151 from around $63 as the company shifts from bitcoin mining towards digital infrastructure leasing.
That would represent a gain of nearly 140%. Founder Scott Ferguson outlined the hedge fund’s assessment on Tuesday at the 13D Monitor Active-Passive Investor Summit.
Ionic Digital shares began trading on Nasdaq in July after the company emerged from Celsius Network’s bankruptcy restructuring.
A lease with infrastructure provider Nscale in Ward County, Texas, underpins Ferguson’s investment case. He identified Microsoft as the site’s end customer.
Ferguson also pointed to potential expansion in Ward County and development opportunities in Midland, Texas, as sources of further value.
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Meanwhile, Sachem Head holds roughly 9.9% of the company. It participated alongside Oaktree Capital Management and Attestor Capital in a $400 million private placement in June.
“We think management is pretty good,” Ferguson said. However, he left open the possibility of greater involvement from his firm, which sometimes pushes companies to change.
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Ionic reported that digital infrastructure leasing generated 90% of second-quarter revenue, compared with none in the corresponding period a year earlier.
Ferguson said Sachem Head planned to file with the Securities and Exchange Commission on Wednesday, detailing its ownership. Ionic will report third-quarter results on November 4 after US financial markets close.
