TeraWulf shares dropped about 14% on Thursday, following a 6.6% decline Wednesday. The company will release third-quarter results before Friday's market opening and hold an earnings conference call Friday at 8 a.m. ET. Analysts forecast a loss of about 19 cents per share and revenue of $61.8 million.
Investors sold crypto-linked and AI data center stocks after the midterm elections while Bitcoin declined. Sherrod Brown, a longstanding skeptic of cryptocurrency, won Ohio's Senate race and will return to the Senate. Crypto-backed political action committees spent more than $60 million seeking to defeat Brown. Investors appear to be reconsidering prospects for crypto legislation, with crypto-linked shares declining alongside Bitcoin. Investors also considered the prospect of stricter scrutiny of data center development under a Democratic-controlled Congress. IREN Ltd., Applied Digital Corp. and Cipher Digital Inc., which compete with TeraWulf, each recorded substantial declines Thursday.
TeraWulf said Wednesday that the company executed credit support agreements with Google for debt financing supporting about $19 billion in contracted lease commitments with Anthropic. The commitments concern TeraWulf's campus in Hawesville, Kentucky. TeraWulf also signed a definitive agreement for Fluor to construct three data center buildings at the campus. Fluor withheld the contract value and expects to record the award in the fourth quarter. TeraWulf said the credit support improves the company's ability to obtain competitive long-term project financing. CFO Patrick Fleury said capital costs are fundamental to developing infrastructure.
TeraWulf's earnings per share fell short of estimates in each of the past four quarters. TeraWulf reported a second-quarter loss of $1.94 per share against an expected loss of $0.22 per share. Second-quarter revenue of $44.8 million also fell short of expectations. Bernstein reduced TeraWulf's price target from $36 to $20 on Wednesday while retaining an Outperform rating. B. Riley had lowered TeraWulf's target from $40 to $26 on October 30 while maintaining a Buy rating.
TeraWulf reached an intraday low of $9.51 on Thursday, setting a new 52-week low. TeraWulf shares have lost roughly two-thirds of their value since reaching a 52-week high of $29.84 in late June. TeraWulf shares are down about 13% year to date. TeraWulf trades below the stock's 20-day, 50-day and 200-day moving averages, approximately $12.17, $14.31 and $18.04, respectively. Those levels leave the stock in a downtrend ahead of Friday's results. Benzinga Pro data showed TeraWulf trading at $10.06, down 14.02%, at publication Thursday.