Spondoolies-Tech to Merge With Bitcoin Shop in Mining Market Shake-Up
UPDATE 21st September 15:05 UTC: BTCS has indicated it has completed the merger with Spondoolies-Tech.
BTCS shareholders now own approximately 55.4% of the merged company, while Spondoolies-Tech shareholders own 44.6% of the new entity.
In a statement, BTCS CEO called the move a "major milestone" that would help reinvent the former bitcoin-specific retail website as a leading transaction processing firm.
Bitcoin Shop (BTCS) and Spondoolies-Tech have signed an agreement that would find the publicly traded bitcoin services firm and the Israeli mining hardware manufacturer merging and continuing under a united brand.
The result, according to BTCS CEO Charles Allen, amounts to a "merger of equals", one that he believes positions BTCS to become a mining operation that could compete against established industrial outlets such as BitFury and KnCMiner.
In interview, Allen elaborated on the merger as well as the company's recent movements in the mining space, which have included securing an 83,000-foot facility and the prior purchase of 550 Th/s of mining hardware from Spondoolies-Tech.
Evoking a classic Baron Rothschild quote, Allen said that in his estimation, the bitcoin mining sector offers the best profit-making opportunity, one compounded by the lack of interest among new investors in contributing to transaction processing on the bitcoin network.
Allen told CoinDesk:
"If you want to change the world and develop software for the next five years, have fun, but we're a public company and we're focused on driving revenue and building a solid business. As a combined entity, we'll be well positioned to have the cash cow in the industry."
Allen indicated his belief that Spondoolies was the best option among a limited number of mid-sized participants in the bitcoin mining hardware manufacturing space, noting the recent struggles experienced by US firms Butterfly Labs and Cointerra.
"Spondoolies never had late issues with their customers," Allen said. "In our minds, they have best product on the market. If you put it all together it really makes for a really solid offering."
The news follows BTCS' 27th April announcement that it had raised $2.3m in new capital through a private placement involving hedge funds and investors.
Though both developments were potentially positive signs for the company, Bitcoin Shop shares declined on the news, tumbling to $0.20 per share from a high of $0.28 earlier in the week.
Puzzle pieces image via Shutterstock
Raj Date-Led VC Firm Backs Align Commerce Seed Round
Circle Raises $50 Million With Goldman Sachs Support