The Independent Electricity System Operator (IESO) awarded capacity contracts to all four of Hut 8’s natural gas-fired power plants in Ontario through a competitive auction process. The deal covers 310 megawatts of capacity across facilities in Iroquois Falls, Kingston, Kapuskasing, and North Bay, with operations set to begin May 1, 2026.

The contracts provide Hut 8 with a weighted average capacity payment of approximately CAD $530 per megawatt per business day in the first year, with built-in inflation adjustments that could increase payments over time. The arrangement transitions the company from short-term seasonal agreements to a stable, long-term revenue stream backed by Ontario’s government-rated electricity operator.

Mixed Financial Performance

The power contract announcement comes as Hut 8 navigates mixed financial results. The company reported full year 2024 revenue of $162.4 million, net income of $331.4 million, and Adjusted EBITDA of $555.7 million. However, for the first quarter of 2025, the company posted revenue of $21.8 million and a net loss of $134.3 million.

The company’s stock has a 52-week high of $45.20 and a 52-week low of $11.86 reflecting the volatility common among Bitcoin mining companies.

Legal Challenges

The company has faced legal challenges related to its acquisition activities. Multiple class-action lawsuits were filed against Hut 8, with the lead case captioned Mayiras v. Hut 8 Corp., No. 24-cv-00904 (S.D.N.Y.), covering the period between November 9, 2023 and January 18, 2024. The class action lawsuit alleges that between November 9, 2023 and January 18, 2024, the company and its executives made materially false and misleading statements regarding its merger with US Bitcoin Corp. (USBTC), specifically failing to disclose that USBTC had an undisclosed related party as a major shareholder, that USBTC’s core King Mountain facility in Texas had historically failed to provide reliable energy and internet services, and that the profitability of USBTC assets was overstated.

The lawsuit claims these misrepresentations led Hut 8 to overpay approximately $745 million for USBTC (which sources allegedly valued at 70% less), and when J Capital Research published a report exposing these issues on January 18, 2024, Hut 8’s stock price plummeted 23.3% in a single day, causing significant investor losses.

In December 2024, Hut 8 filed a motion to dismiss the shareholder lawsuit, claiming it stemmed from a “short-and-distort” scheme by J Capital Research, a short-selling firm. At this time the court has not ruled to dismiss.

Market Context

Despite its obstacles, the deal provides Hut 8 with exposure to a government-backed counterparty rated AA3 with a positive outlook by Moody’s – resulting in many  analysts now rating the company as a “Strong Buy” with a 12-month stock price forecast of $26.64. Hut 8 trades on both the Nasdaq and Toronto Stock Exchange under the symbol HUT.

---

Filed under: Bitcoin - @ July 4, 2025 10:27 am