Shares of CleanSpark Inc (OTCMKTS: CLSK) are surging after succumbing to bearish pressure in recent weeks. The stock had an excellent start to the year that saw it rally to highs of $6 a share before plunging back to the $2 a share level. Amidst the plunge, the stock has once again started bottoming out.
CLSK Price Analysis
Market sentiments appear to have received a boost on the Company securing a $20 million financing poised to support the Company’s initiatives for commercial customers. The Company confirming new orders and backlog driven by IP acquisition should continue to prop the stock’s sentiments after the recent pullback.
CleanSpark remains well positioned to generate significant sales in 2019 after inking a $900,000 contract with Bethel-Webcor at the end of the first quarter. The Company has also made significant progress on the execution of an $18.3 million agreement for a large-scale commercial microgrid deal with an S&P 500 company.
Expansion into the international markets on the signing of a contract to become a technical consultant for a large industrial park in Costa Rica all but affirms what could turn out to be a breakout year. Amidst the string of positive developments, the stock price is yet to reflect the Company’s tremendous potential.
While the stock has taken a significant hit in recent months, a bounce back following steep pullback could come into play. The $3 a share mark is the immediate resistance level standing in the way of further upside action.
A rally followed by a close above the $3 mark should open the door for the stock to make a run for this year highs of $6 a share. Conversely, failure to find support above the $6 a share mark could result in the stock plunging lower in continuation of the bear trend that began in February.
What Does CleanSpark Do?
CleanSpark is a Microgrid and custom electrical equipment company. The Company develops and distributes advanced engineering, software, and controls for innovative distributed energy resource management systems.
Why is CleanSpark Bottoming Out?
CleanSpark has started bottoming out after hitting bottom following a major correction. Fuelling the upward momentum is the confirmation that the Company has released a production version of its Microgrid Value Stream Optimizer.
The new system utilizes high-level analytics and storage solutions to help customers save a substantial amount of money on utility costs.
“CleanSpark’s software follows an optimization path from Microgrid sizing and design all the way through to real-time operation so that customers can feel confident in the accuracy of the projected revenue and savings,” said CEO Mathew Schultz.
The unveiling of the new Microgrid Value Stream Optimizer comes on the heels of CleanSpark securing a $20 million capital raise. The Company remains well financed to sale Microgrid projects all in the effort of accelerating broad adoption.
Plans are underway to utilize part of the $20 million financing to accelerate the development and deployment of CleanSpark’s Distributed Energy Resource Solutions for commercial customers.
The cannabis industry is one of the sectors the Company has set sights on as part of the energy solutions, commercialization drive.
The Company’s energy saving solutions have the potential to be a big hit in the cannabis sector as cannabis producers look for ways to decrease the cost of energy with each pound of final product produced.
Since the start of the year, CleanSpark has delivered $357,000 worth of custom electrical equipment to customers. The Company has also secured custom equipment backlog worth $438,000. Custom equipment backlog has so far increased to about $3.9 million.
“These orders represent the ongoing demand for critical power systems that provide reliable, intelligent power to increasingly complex energy solutions. Our sales team is continuing to identify opportunities as we expand into this market segment. We anticipate reporting on new opportunities and further increases in our backlog in the upcoming quarter,” stated Chief Financial Officer Zachary Bradford.
CleanSpark is a potential bounce-back play after taking a significant hit in recent months. Its growing electrical equipment backlog is one of the developments that point to a bright future when it comes to revenue generation.
The Company has since embarked on an aggressive commercialization drive as it seeks to secure more orders for its electrical equipment. With the future looking bright on the execution of the core business, market sentiments should continue to improve.
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Disclosure: We have no position in CLSK and have not been compensated for this article.