Keel Infrastructure Corp. (NASDAQ: KEEL) experienced a significant sell-off on Thursday, with its stock price dropping 13.66% to $4.64 as of 12:36 p.m. EDT. The decline wiped out approximately $447 million in equity value, based on Google Finance's share count of 603.83 million shares, bringing the company's market capitalization down to $2.82 billion.
The loss in market value closely mirrors the $445.4 million in net proceeds the company raised from its June convertible senior note offering, which totaled $458 million in gross proceeds before expenses related to capped-call transactions. This development comes just three days after Keel was added to the Russell 3000 index, a milestone that had been expected to broaden its investor base.
The stock's slide is particularly notable as Keel transitions from bitcoin mining to more capital-intensive data center and energy infrastructure projects. With shares trading well below the note's conversion price of approximately $7.41 per share, future financing could become more expensive. The conversion price is about 60% above Thursday's closing price of $4.64 and sits just above the stock's 52-week high of $7.37.
The convertible notes carry a low 1.25% interest rate and are convertible at around $7.41 per share. Keel also entered into capped-call transactions to reduce potential dilution up to a share price of $11.86. Proceeds from the note sale were allocated to these capped-call deals and for corporate purposes, including deposits on long-lead equipment and letters of credit for data center projects.
The company had previously reported approximately $533 million in liquidity as of May 8, comprising $336 million in unrestricted cash and $197 million in unencumbered bitcoin. CFO Jonathan Mir stated in May that this liquidity is sufficient to fully fund capital needs for the Panther Creek, Sharon, and Moses Lake projects, including lease execution and construction kickoff, through 2028.
CEO Ben Gagnon noted that Keel has relocated its base to the U.S., exited Latin American operations, and shifted its pipeline to target tight supply in North American high-performance computing and AI markets. Lease execution at Panther Creek, Sharon, and Moses Lake is expected in 2026.
The company's financial results show the urgency of securing leases. Keel reported first-quarter revenue of $37 million, down 23% year-over-year, with an operating loss of $98 million and adjusted EBITDA of negative $17 million. The stock's decline adds pressure to demonstrate progress on its energy pipeline.
Keel's addition to the Russell 3000 on Monday was seen as a positive catalyst. FTSE Russell noted that approximately $12.2 trillion in investor assets track or use Russell U.S. indexes. The rebalanced indexes began trading with the U.S. market open on June 29. However, the subsequent stock price drop has dampened the initial enthusiasm.
With the Independence Day holiday on Friday, July 3, Thursday's session marked the final regular trading day before the break. The stock's performance raises questions about whether Keel can convert its 2.2 GW pipeline into leases before cash burn becomes a concern for valuation once again.
