Why Keel Infrastructure Stock Dived by Over 12% Today

Keel Infrastructure (NASDAQ: KEEL), one of numerous crypto miners pivoting into the operation of next-generation, artificial intelligence (AI) data centers, reported its second-quarter results before market open on Monday. It might be wishing it hadn't, though, as investors greeted the news by trading the company's stock down by more than 12% that day.

Post-Bitcoin blues

For the quarter, Keel's revenue fell a steep 50% year over year to $30 million. The company only recently jettisoned its Bitcoin mining operations; still, this legacy business was affected by the significant slump in the cryptocurrency's price.

On a slightly brighter note, the company managed to trim its operating expenses to just over $54 million, down from almost $69 million a year ago. That didn't prevent its headline net loss from deepening, however, to almost $65 million ($0.11 per share) from the year-ago quarter's $59 million and change.

That meant a mixed quarter. The consensus analyst estimate for revenue was $28.2 billion, but their projection for net loss was only $0.05 per share.

Sounding an optimistic note on recent developments, Keel pointed out that all three of its priority sites are close to full permitting. It added that, for each, it is in discussions with multiple potential tenants. It did not specifically name any of these entities.

Strategic delays

Yet the development of AI data centers is facing numerous bottlenecks in this country, not least the considerable power generation needs for such facilities. I believe many investors are losing patience with Keel, which began its strategic pivot last year.

Since the company is in transition from one business model to another, it hasn't yet proven it can succeed with the new strategy. Meanwhile, rivals are making larger strides. Given that, I'd avoid the stock for now.

Eric Volkman has positions in Bitcoin. The Motley Fool has positions in and recommends Bitcoin. The Motley Fool has a disclosure policy.