What’s Behind the Recent Surge in CleanSpark Inc (OTCMKTS:CLSK)?

What’s Behind the Recent Surge in CleanSpark Inc (OTCMKTS:CLSK)?

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There have been a number of sudden hot pops on the OTC over recent days, with CleanSpark Inc (OTCMKTS:CLSK) providing an excellent example. Shares of the stock have shocked detractors and surged higher by nearly 100% in the past two days. Helping to power the story, the company just announced, along with Pioneer Power Solutions, Inc. (NASDAQ: PPSI), a company engaged in the manufacture, sale and service of electrical transmission, distribution and on-site power generation equipment, that the two companies have closed a merger transaction wherein CleanSpark acquired Pioneer’s wholly owned subsidiary, Pioneer Critical Power, Inc. (PCPI). 

According to the release, “The entity acquired is not related to Pioneer’s engine generator business headquartered in Minneapolis, Minnesota operating under the same name. Pioneer will continue to retain and operate that business under the PCPI name and CleanSpark will change the name of the acquired entity to CleanSpark Critical Power Systems, Inc., no later than February 22, 2019.”

CleanSpark Inc (OTCMKTS:CLSK) bills itself as a company that provides energy software and control technology in the United States.

The company offers an integrated distributed energy management control platform that provides energy generation with storage devices, as well as controls facility loads to provide energy security in real time to commercial, industrial, mining, defense, campus, and residential users.

It also provides turnkey microgrid implementation services, microgrid design and engineering, project development consulting, and solar photovoltaic installation and consulting. In addition, the company offers mPulse software suite, a modular platform that enables fine-grained control of a Microgrid; and microgrid value stream optimizer that provides a robust distributed energy and microgrid system modeling solution.

Further, it converts various materials, including municipal solid waste, municipal sewage sludge, food and cooking waste, petroleum sludge and oily wastes, animal manures, cellulosic and non-cellulosic biomass, energy crops, scrap tires, and coal into SynGas.

The company’s SynGas is used as clean, renewable, environmentally friendly, and warming fuel for power plants and motor vehicles; and as feedstock for the generation of di-methyl ether. The company was formerly known as Stratean Inc. and changed its name to CleanSpark, Inc. in November 2016. CleanSpark, Inc. was incorporated in 1987 and is based in Bountiful, Utah.

According to company materials, “CleanSpark provides advanced energy software and control technology that enables a plug-and-play enterprise solution to modern energy challenges. Our services consist of intelligent energy monitoring and controls, microgrid design and engineering, microgrid consulting services, and turn-key microgrid implementation services. CleanSpark’s software allows energy users to obtain resiliency and economic optimization. Our software is uniquely capable of enabling a microgrid to be scaled to the user’s specific needs and can be widely implemented across commercial, industrial, military and municipal deployment.”

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As noted above, CLSK just announced, along with Pioneer Power Solutions, Inc. (NASDAQ: PPSI), a company engaged in the manufacture, sale and service of electrical transmission, distribution and on-site power generation equipment, that the two companies have closed a merger transaction wherein CleanSpark acquired Pioneer’s wholly owned subsidiary, Pioneer Critical Power, Inc. (PCPI). 

The chart shows 53% tacked on to share pricing for the listing in the past month. What’s more, the company has benefitted from a jump in recent trading volume to the tune of greater than 420% over the long run average. This should not be overlooked with a float in play that’s limited — under 24M shares.

“This acquisition will allow CleanSpark to continue to build our intellectual property portfolio and secure substantial revenues, without the capital exposure generally required to operating a manufacturing facility,” stated CleanSpark’s President and CFO, Zachary Bradford. “We’ll own the rights to the customer base, the intellectual property and a, UL (Underwriters Laboratories) file portfolio and we expect to benefit from the associated existing and future revenues, but without the exposure of large capital investments in inventory, equipment and facilities. As a result of this transaction, the prior agreement between CleanSpark and PPSI, to acquire Pioneer Custom Electrical Products has been terminated with the mutual agreement of both parties.”

Currently trading at a market capitalization of $143.14M, CLSK has a stash ($413K) of cash on the books, which must be weighed relative to about $1.3M in total current liabilities. CLSK is pulling in trailing 12-month revenues of $579K. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 88%. As more color becomes clear on the name, we will review the situation and update our take. Sign-up for continuing coverage on shares of $CLSK stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $CLSK, either long or short, and we have not been compensated for this article.

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