SharkWater Trading • Digital Infrastructure • Power • Speculative
KEEL: A Two Billion Dollar Bet That Somebody Signs A Lease
August 18, 2026
Bottom Line Up Front
Keel Infrastructure is the company formerly known as Bitfarms. It redomiciled to the US, rebranded on April 1, and is converting itself from a Bitcoin miner into a landlord for AI and high performance computing. Market cap is roughly $2.1 billion at about $3.54 a share.
Revenue from the HPC business is zero. The legacy mining revenue that remains carried a gross margin of negative 285 percent last quarter. What you are actually buying is 2.2 gigawatts of pipeline, three permitted sites, $819 million of liquidity, and the proposition that a creditworthy tenant signs a long term lease. Everything else in the financials is noise on the way to that one event.
What You Are Actually Buying
Strip away the transformation story and Keel is three things.
One: interconnection queue position. A 2.2 gigawatt development pipeline with established grid interconnections already in place, spanning PJM in Pennsylvania, Grant County PUD in Washington State, and Hydro-Québec territory in Canada. In a market where the binding constraint on AI buildout is power delivery rather than chips, an existing interconnect is the scarce asset. CEO Ben Gagnon put it plainly on the Q2 call: power is the constraint, and everything else is downstream of it.
Two: a cash pile. $819 million of liquidity as of August 7, made up of roughly $698 million in unrestricted cash and $121 million in unencumbered Bitcoin, funded in part by a $458 million convertible note offering during the quarter.
Three: a melting ice cube that used to be the business. All US Bitcoin mining has been decommissioned. The remaining legacy operation produced $30.4 million of revenue in Q2 against $117.2 million of cost of revenues.
The Sites
| Site | Location | Status |
|---|---|---|
| Moses Lake | Washington | First Vertiv modules delivered. Likely first to commission. |
| Panther Creek | Pennsylvania (PJM) | Conditional land development approval secured. |
| Sharon | Pennsylvania (PJM) | Zoning secured, long-lead items arriving. |
| Scrubgrass | Pennsylvania | Potential gigawatt. 750 MW load study with FirstEnergy, visibility expected Q3 to Q4. |
| Sherbrooke | Québec | Agreement with Hydro-Sherbrooke for conditional transfer of 96 MW plus land purchase. |
Management describes active negotiations with multiple prospective tenants at each of the three priority sites, targets lease execution in 2026, and commissioning in 2027. Environmental permitting is progressing across all three. Fiber contracts are in final execution.
Note what is absent from that list: a signed lease.
The Q2 Numbers, And The One Line Everybody Skipped
| Q2 2026 (continuing operations) | Amount | vs Q2 2025 |
|---|---|---|
| Revenue | $30.4M | -50% |
| Cost of revenues | $117.2M | +81% |
| Gross margin | -285% | from -6% |
| G&A | $31.3M | +62% |
| Operating loss | -$140.8M | from +$10.8M |
| Depreciation & amortization | $84.1M | +218% |
| Gain on derivatives | +$77.0M | from +$3.8M |
| Loss from continuing ops | -$64.0M, or -$0.11/sh | from +$13.2M |
| Adjusted EBITDA | -$23.7M | from +$6.6M |
Look at the derivative line. Keel lost $140.8 million at the operating level. It reported a loss from continuing operations of $64.0 million. The bridge between those two numbers is largely a $77.0 million non-cash gain on derivative assets and liabilities, tied to the marks on its convertible notes and the associated capped call transactions.
That gain is an accounting revaluation, not cash, and it reverses when the marks move the other way. Anyone reading the headline loss per share of eleven cents and concluding the burn is modest has read the wrong line. The operating burn is roughly twice that, and the adjusted EBITDA figure of negative $23.7 million is the honest read on cash profitability.
This is the same species of thing as the return of capital footnote in an income ETF or the customer warrant amortization at a newly public chip company. The interesting number is never the one in the headline. It is the one three lines below it that explains why the headline looks the way it does.
The Bitcoin Stack Is Bridge Financing, And It Is Nearly Spent
Between April 1 and August 7, Keel sold 1,085 Bitcoin for $75 million in proceeds, an average of roughly $69,100 per coin. The remaining balance stands at 1,861 BTC, carried at about $121 million.
Do the arithmetic on what that means. The Bitcoin treasury is now about 15 percent of total liquidity. The company started this transition with just under 2,500 coins and has been selling them down deliberately to fund the pivot. That funding source has maybe one more meaningful draw left in it.
From here, the capital comes from the convertible notes already raised, from future equity or debt, or from project level construction financing. And project financing is precisely what requires a signed lease with a creditworthy tenant.
Here is the structural point that makes this company legible. Management has said it intends to finance construction through investment grade tenants and credit wrapped leases rather than by tapping capital markets. That means the lease is not merely the revenue event. The lease is the key that unlocks the construction financing. The $819 million on the balance sheet is designed to carry the company to signature, not to build the data centers. Understand that and the entire investment case collapses into a single question with a binary answer.
What The Market Is Paying Per Megawatt
Conventional multiples are meaningless here. Price to sales on a business being deliberately shut down tells you nothing. So price the asset instead.
| Basis | Capacity | Market cap per MW |
|---|---|---|
| Full stated pipeline | 2,200 MW | ~$0.95M |
| Active plus secured only | ~771 MW | ~$2.7M |
The gap between those two rows is the entire debate. The 2.2 gigawatt figure includes roughly 1.5 gigawatts described as expansion and evaluation, which is a different category of asset than energized capacity with a live interconnect. If the Scrubgrass 750 megawatt load study with FirstEnergy comes back favorably in the Q3 to Q4 window, a large chunk of that speculative bucket moves toward the secured column, and the per megawatt math changes materially.
Also remember that roughly $819 million of the $2.1 billion market cap is liquidity sitting on the balance sheet. Back that out and the market is assigning something on the order of $1.3 billion to the pipeline, the permits, and the team, against convertible obligations that will eventually either convert into shares or come due.
Bull Case
Power is genuinely the bottleneck in AI infrastructure right now, and Keel holds interconnection positions in PJM and the Pacific Northwest that would take years and considerable litigation to replicate from scratch. The balance sheet is the strongest in company history by management's own account, funded partly with 1.25 percent convertible paper, which is remarkably cheap capital for a business at this stage. Three sites are near full permitting with multiple prospective tenants negotiating for each. The company brought in a President specifically to run commercial and expansion activity, which is what you do when you expect to be signing contracts. The legacy mining drag is now largely decommissioned rather than lingering. Analyst consensus sits at Strong Buy with an average target near $6.67, roughly 88 percent above the current price. And a single anchor lease at any one of these sites would re-rate the equity in a way no amount of quarterly progress reporting can.
Bear Case
There is no lease. "Active negotiations" and "deepening commercial engagement" are the language of companies that have not yet closed. Hyperscalers and neoclouds have many suitors, and Keel is a first-time HPC developer competing against operators with track records.
The burn is real and the runway has a shape. Negative $23.7 million adjusted EBITDA per quarter is the baseline before development capital. Miss the 2026 lease target and 2027 commissioning slips, which pushes the financing question into a market that may be less friendly to speculative data center credit than it is today.
Dilution is structural, not hypothetical. The company's own risk factors name potential dilution from future stock issuances, conversion of the convertible notes, and exercise of options and warrants, plus counterparty risk on the capped call transactions.
Execution risk is stacked. Environmental permitting across three jurisdictions, supply chain and tariff exposure on long-lead equipment, community opposition to data centers, and regulated power rates in Québec, Pennsylvania, and Washington. Any one of those can add quarters.
And the residual Bitcoin exposure cuts both ways. $121 million of the liquidity is a volatile asset the company is trying to sell into strength while also depending on it.
A Word About The 2x ETF
There is a Defiance Daily Target 2X Long KEEL ETF trading under KEEX, with about $4.7 million in net assets and a 1.31 percent expense ratio. Its 52 week range runs from $15.35 to $181.67.
That range is not a typo and it is not an opportunity. It is what daily-reset leverage does to a volatile underlying over time. The fund resets its 200 percent exposure every day, so a stock that chops sideways with big swings grinds the leveraged product down regardless of where the underlying finishes. The prospectus language is explicit that investors could lose their entire principal in a single trading day.
Worth knowing for a second reason: flows into and out of leveraged products like this can create mechanical buying and selling pressure in a $2 billion stock. Some of the daily moves in KEEL are not information. They are rebalancing.
The SharkWater Take
I like this setup more than I expected to, and I would size it like the venture position it is.
The thesis is unusually clean. Most speculative names ask you to believe five things at once. Keel asks you to believe one: that a creditworthy tenant signs a long term lease at Moses Lake, Panther Creek, or Sharon, on terms that make the construction financing work. If that happens, the pipeline reprices from optionality to contracted cash flow and the current $2.7 million per secured megawatt looks cheap. If it does not happen in 2026, you are holding a cash-burning developer with convertible obligations and a shrinking Bitcoin stack, waiting on a 2027 that costs more to reach.
What I would actually watch, in order: the Scrubgrass load study result in the Q3 to Q4 window, because it either validates or deflates two thirds of the stated pipeline. Then any 8-K announcing a lease, because that is the entire thesis in a single filing. Then the cash balance each quarter against the $23.7 million adjusted EBITDA baseline plus development spend, because runway is what buys negotiating leverage, and management explicitly framed the $819 million as the source of that leverage.
One thing I would not do here is sell puts the way I would on an asset-backed closed end fund. When you sell a put on a fund holding Treasuries, assignment hands you T-bills at a discount. When you sell a put on Keel, assignment hands you a pre-revenue developer with negative gross margins and a binary catalyst. The premium may look attractive because the implied volatility is enormous, and that volatility is telling you something true. Respect it.
This is a position you size in basis points, enter with a thesis you wrote down, and exit on the catalyst rather than the narrative. It is not a core holding and the company's own filings say trading in its securities should be considered highly speculative. I take management at its word on that.
Fair winds and following seas.
Disclaimer: This post is for informational and educational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any security. Financial figures are drawn from Keel Infrastructure's Q2 2026 results release and related SEC filings as of August 2026 and are subject to revision. Market capitalization, per-megawatt calculations, and capacity splits are the author's estimates derived from company disclosures, not reported company metrics, and depend on assumptions about share count and pipeline classification. Forward-looking statements regarding lease execution, permitting, and commissioning timelines are management's and are not assured. The company is loss-making, has negative gross margins in its legacy segment, and its own filings state that trading in its securities should be considered highly speculative. Leveraged ETFs referenced are not recommendations and carry risk of total loss. Verify all figures against primary filings before acting. Past performance does not guarantee future results. Consult a licensed financial professional regarding your specific situation.
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