Articles by Eric Volkman

Technology

Why Cipher Mining Stock Crushed It on Wednesday

There was no mystery behind the rise of Cipher Mining (CIFR 11.75%) stock on Wednesday, as it easily surmounted the hump of Hump Day with a nearly 12% increase in price. The good performance of the crypto it mines and an encouraging operational update were the catalysts for that pop. Which, incidentally, trounced the S&P 500 index's 0.6% gain that day. A bounce by the crypto champion That foundational crypto for Cipher Mining is, of course, Bitcoin. Following a mini-rout that saw the No. 1 coin retreat from its record high, it was staging something of a rally on Wednesday. A more valuable Bitcoin is beneficial to the entities that mine it, for obvious reasons. Rewinding a bit in time, after market close on Tuesday Cipher Mining published its regular monthly update for September. The market clearly liked what it heard from the company. During the month, Cipher Mining minted 251 Bitcoin, which was up rather notably from the 241 it produced in August. This was despite a slight decline in total deployed mining rig count (to 114,000 from the month-ago 115,000). The figure for Bitcoin sold was much higher at 158 versus 42. Business diversification While those month-over-month increases were encouraging, investors should bear in mind that Cipher Mining is quickly getting past its days as a pure-play Bitcoin miner. Like some of its peers, it's leveraging its assets to push into the hot segments of artificial intelligence (AI) and high-performance computing (HPC) infrastructure hosting.

Technology

Why Investors Were Fired up About Cleveland-Cliffs Stock Today

Market players are eager to lend Cleveland-Cliffs (CLF 8.63%) money, so much so that a planned debt issue was quickly and substantially upsized. That impressed the market enough to send the company's equity skyward, and in late-session action the large steel maker's stock was up by 9% in price. That performance was notably hotter than that of the S&P 500 index, which was rising by 0.6%. A bigger issue Tuesday morning before market open, Cleveland-Cliffs announced that it would float a fresh issue of senior unsecured guaranteed notes (a type of corporate bond). Then, very shortly after market close that day, it announced it had upsized the issue by nearly 40%. In the initial announcement, Cleveland-Cliffs said the flotation would consist of $200 million aggregate principal amount of such notes maturing in 2034. This was to be an extension of a previous issue of such securities and would pay the same interest rate of just under 7.63%. In the follow-up to the announcement, Cleveland-Cliffs said it was boosting the aggregate principal amount to $275 million. These are to be issued at a price of almost 102.8% of their principal amount, to land at an implied yield of slightly below 7% for investors. The company said it will use its proceeds from the issue to retire debt incurred under an asset-based lending facility. Borrowing to grow Owning, running, and maintaining a huge steel making operation is a vastly expensive undertaking, so debt financing is typically necessary in the industry. That, plus the fact that Cleveland-Cliffs loaded up on it significantly with its 2024 acquisition of Canadian peer Stelco has pushed its total long-term debt past $7.7 billion (as of the end of June). The new flotation will be just a drop in that bucket, yet it shows that investors have confidence in the company to satisfy such financial obligations.