Follow Keel Infrastructure to never miss an important update.
Rachel Silverstein has finished her time as Executive Vice President, General Counsel, and Corporate Secretary. The company announced the change in a regulatory filing this week, noting that her departure was effective as of November 4.
While the General Counsel is the top legal officer, this appears to be an orderly exit rather than a sudden shift in leadership. For a company in the middle of a complex pivot from crypto mining to building AI data centers, keeping the legal and regulatory team steady is important, but a single departure at this level rarely changes the long-term path of the business.
Source: 8-K filing
Goldman Sachs set a $2 price target for the company, which is just above where the stock trades today. This follows a period where the stock has dropped significantly as the business moves away from its original focus on Bitcoin mining. While the average target from all analysts who follow the stock is higher at $5, this more conservative view reflects the risks of the transition. The company is currently spending heavily to build out data centers for AI, but it has not yet signed the binding leases needed to prove those sites will be profitable.
Source: Goldman Sachs
After Keel Infrastructure reported its November results, we updated our fair value. We moved our rating from Avoid to Watch and added the risk of non-cash losses from the financial tools the company uses to manage its debt. We have also started tracking the engineering delays caused by new Pennsylvania state building regulations. We now count the specialized design work required for next-generation AI chips among the technical hurdles the business must overcome as it converts its power sites into data centers.
Keel reported $30 million in revenue for the quarter, which was ahead of the $20 million analysts expected. The company is in the middle of a difficult shift, shutting down its old Bitcoin mining business to build data centers for AI companies. This transition is expensive, and the company lost 10 cents per share this quarter, slightly more than the 9 cents analysts had predicted.
The real test for Keel is whether it can turn its power supply into signed contracts. Management says it is in advanced lease talks for three sites and has started construction at its Moses Lake location, which should start earning money in 2027. With $780 million in cash, the company has enough runway to keep building for now, but it still needs to prove it can land big-name customers to justify its high spending.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
After Keel Infrastructure reported its August results, we updated our fair value. We changed our rating to Avoid and cut our quality score to 2.6. We reset our projections for sales growth and how much room the business has left to expand. We added the rising cost of hiring construction experts and the impact of bitcoin price volatility on cash reserves to what we track.
Management has missed its own profit targets for six straight quarters, showing that the expensive pivot from crypto mining to data centers is proving harder to budget for than they expected.
| Expectation | |
|---|---|
| EPS | $-0.07 |
| Revenue | $21M |
Follow Keel Infrastructure to get the latest and most important updates.
Follow KEEL