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Hut 8 is a Canada-based, TSX/Nasdaq-listed mining company. But it doesn’t mine gold or ore — it mines Bitcoin, and is the first mining company to qualify for a major exchange listing in October 2019, with free relief for innovative companies through the TSX Sandbox.
Finding an auditor or even a bank relationship has been a big challenge for crypto-asset and blockchain companies. Pioneering in a very new sector with little institutional research or traction was one of the many challenges early IR faced, along with investor outreach and education, and developing a deep and diverse stakeholder base.
Sue Ennis joined the company in late 2020 as Vice President of Corporate Development. She has seen a lot in 18 months. CEO Jaime Leverton joined at the same time and together they form a female IR leadership duo in a highly male-dominated industry.
Earlier this year, Hut 8 added cloud and data center services to its offerings, aiming to help gaming and measurement companies build the Web3 world of the future. At the end of 2021, the market value of Hat 8 was boosted north of C$3 billion ($2.34 billion), but by the beginning of July 2022 – during the ‘Crypto Winter’ – it had fallen to C$370 mn. The outbreak then saw retail investors grow from 20 percent to 35 percent of trades, and Hat 8 was a beneficiary of this trend.
‘WallStreetBets and GameStop turned IR on its head,’ says Ennis. ‘It was the power of retail investor volumes that helped us reach the top companies of the S&P/TSX Composite Index, the first blockchain company.’
How little supersize it can be.
Along with retail investors, the Internet and social media communities are critical to Hut 8’s IR strategy, Ennis said. ‘The Internet is the new decentralized hedge fund,’ she says. Lacking bank and traditional analyst coverage, investors turn to the Internet and various community forums for information. Retail accounts for about 65 percent of Hut 8 investors, and Ennis points out that you can’t ignore small retail investors when you think about how information can be shared freely and quickly online.
She remembers being new to the business and trying to learn about her investors. ‘I looked up Hut 8 on YouTube and noticed a lot of mentions and activities,’ she says. ‘So I left comments on the channels introducing myself, and soon a lot of community organizers started contacting me.’
YouTube communities talking about Hut 8 are typically run by regular people like Paul Baron, Talkin’ Investing or Zac Hartley, communities with a few hundred to 300,000 followers start as a side gig. Today, Ennis does regular interviews, Ask Me Anything, and post-earnings calls with multiple social media communities, including Twitter Spaces and Facebook. ‘We recently did a YouTube community interview that got almost 75,000 views,’ she recalls. Before long, our inbox was full of questions and inquiries. It was a huge success!’
According to Ennis, these community members want more than information. It’s a cult of people built around their support for Hut 8 and often other blockchain or new economy companies, a very strong emotional connection. “Many people live their lives online and now almost always get to know each other, follow each other’s achievements and even do business with each other,” she said.
Hut 8’s StockTwits community has 63,000 followers and, according to Ennis, a huge percentage of them are chatting about the company online every day. ‘As an IRO, you need to know where your end customers are and contact them directly to get the highest ROI,’ she says.
‘Media Misinformation’
One of her biggest challenges is ESG: ‘There is a huge amount of misinformation in the media about the environmental impact of bitcoin mining, so education and lobbying are key issues for us.’
Hut 8 has selected its relevant ESG metrics in line with SASB and GRI. In the year By 2021, the company has set specific goals to reduce its environmental footprint and achieve carbon neutrality by 2025, and detailed a full set of social, governance and other goals in its first sustainability report.
Ennis is also ready for more change. ‘These aren’t just 18-year-olds in their mum’s basement – we also have value investors,’ she says. Many people don’t realize how fast this adaptation is: you can now buy Bitcoin for your retirement account through traditional institutions like Fidelity.
Linda Montgomery is a Toronto-based fintech and digital assets marketing executive and IR specialist.
This article originally appeared in the Fall 2022 issue. IR magazine.
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