Cipher Mining expands data center deal with Fluidstack for $830 million

NEW YORK - Cipher Mining Inc. (NASDAQ:CIFR) announced Thursday a 10-year high-performance computing colocation agreement with AI cloud platform Fluidstack, expanding their existing partnership at the Barber Lake site in Colorado City, Texas. The company, currently valued at $5.8 billion, has seen its stock surge 124.6% over the past year despite recent volatility, according to InvestingPro data.

Under the agreement, Cipher will deliver an additional 39 MW of critical IT load at the facility, bringing Fluidstack’s total lease to the entire 300 MW capacity at the site. The transaction secures approximately $830 million in contracted revenue over the initial 10-year term and includes two five-year extension options that could increase the total value to approximately $2 billion.

Google will backstop an additional $333 million of Fluidstack’s lease obligations to support project-related debt, increasing its total backstop commitment to $1.73 billion.

Cipher plans to finance the construction using project-related debt proceeds and approximately $118 million in additional equity contributions. The company estimates project costs at approximately $9-$10 million per MW of critical IT load, with expected site net operating income margins of 85%-90%.

"This third transaction further validates Cipher’s position as a leader in HPC development and underscores the strong momentum that will continue to drive growth across our pipeline of sites," said Tyler Page, Cipher’s CEO, in a press release statement.

The company maintains a pipeline of approximately 3.2 GW being prioritized for HPC development. Morgan Stanley & Co. LLC acted as sole financial advisor to Cipher on the transaction.

The expanded agreement brings the total contracted revenue across the entire partnership to approximately $3.8 billion over the initial 10-year term, with potential to reach approximately $9 billion if all extension options are exercised.

In other recent news, Cipher Mining Inc. has been active in the financial markets with significant developments. The company announced plans to issue an additional $333 million in senior secured notes through its subsidiary, Cipher Compute LLC, which will bring the total outstanding amount to $1.733 billion. This follows the completion of a $1.4 billion senior secured notes offering, intended to finance the construction of the Barber Lake Facility in Texas. The notes, due in 2030, were sold to qualified institutional buyers in the U.S. and non-U.S. persons under specific regulations.

In terms of analyst coverage, Cipher Mining received a Market Outperform rating from Citizens, with a price target of $30.00. Analyst Greg Miller from Citizens highlighted the company’s strategic shift towards maximizing its 3.8 gigawatt power capacity in Texas, suggesting a potential future stock price increase. Additionally, the company experienced a stock price decline following the announcement of the $1.4 billion notes offering. This was part of a broader sell-off in crypto-related stocks as Bitcoin fell below the $100,000 mark, impacting several companies in the sector.

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