Stronghold Digital Mining has announced its consideration of a sale or other strategic options aimed at maximizing shareholder value, coinciding with the release of its robust first-quarter financial and operational results on May 2.

Under the guidance of Cohen and Company Capital Markets and legal counsel from Vinson & Elkins LLP, Stronghold is exploring various possibilities, including the potential sale of some or all of its business or other strategic transactions involving its assets. This review comes at a time when the company has noticed a valuation gap compared to its peers in the Bitcoin mining, merchant power, and data center sectors.

However, the plan is not finalized, and there is no specific deadline. Stronghold does not plan to make further announcements unless approved by the board, until a transaction is approved, or if it deems disclosure necessary.

In terms of revenue, Stronghold reported $27.5 million for the first quarter of 2024, representing a sequential increase of 27% and a year-over-year increase of 59%. Most of this revenue, $26.7 million, came from crypto operations, with the remainder from energy sales and other activities.

The company also reported reduced fixed costs in the first quarter, down 3% sequentially and 11% year-over-year, with GAAP net income of $5.8 million and non-GAAP Adjusted EBITDA of $8.7 million.

Despite its strong financial performance, CEO and chairman Greg Beard noted a valuation discrepancy compared to peer Bitcoin mining firms and other related companies. According to data from CompaniesMarketCap, Stronghold's market cap is currently $40.4 million, significantly lower than leading crypto mining company Marathon, which has a market cap of $4.65 billion.

Beard highlighted Stronghold's potential for mining power expansion and its distinguishing qualities, including substantial infrastructure and carbon capture potential, which could appeal to potential buyers or partners.