What happened
Shares of CleanSpark (CLSK +3.53%) spiked higher on Wednesday, after the company announced it had made a relatively large sale. As of 11 a.m. EST, the stock was up 10%.
So what
CleanSpark has been in the news in recent weeks thanks to the new bitcoin-mining side of its business. After its December acquisition of ATL Data Center, the company got right to work mining bitcoin. And considering the price of bitcoin has been on the up and up, the opportunity was received enthusiastically by investors.
Image source: Getty Images.
However, CleanSpark's primary business is in the energy sector. Specifically, it provides technology solutions for microgrids -- self-sufficient electricity systems. The company's CEO said that the two sides of the business "make us a true 'dual-threat' as we continue our rapid growth across all of our divisions."
Today, CleanSpark announced it had signed a multi-year deal with a microgrid company in Houston to provide its automatic transfer switches (ATS). Management expects the deal will be worth $1.5 million in additional revenue.
Now what
Yes, I said $1.5 million. That may sound like a meager sum, but that's a big number for CleanSpark. The company only had $10 million in full-year revenue for its fiscal 2020. Therefore, today's news is a big deal, relatively speaking.
However, with a market capitalization already approaching $700 million, investors have undeniably high expectations for this company's growth prospects. On one hand, this is understandable. After all, it grew revenue 122% year over year last year. That said, the stock trades at close to 70 times trailing sales -- a pricey valuation likely requiring flawless execution to pan out as a good long-term investment.
