Bitdeer stock pops and drops on $4.7 billion AI data center lease in Norway

Bitdeer shares surged in premarket trading on Tuesday after disclosing financial details and tenant identity for a 16-year, $4.7 billion AI data center agreement at its Tydal campus in Norway.

Shares pulled back from early gains to trade at $12.24 on Tuesday morning, up 8%. The stock (BTDR) had fallen roughly 7% on June 29 when Bitdeer first announced the lease without identifying the tenant or disclosing financial terms.

Bitdeer said in a statement that its subsidiary, Tydal Data Center AS, signed a modified gross lease with Volta Tydal AS, a subsidiary of Volta, to provide 121 IT megawatts of AI computing capacity across four data halls.

The agreement includes an eight-year renewal option that would increase the total contract value to approximately $8 billion over 24 years.

According to the statement, the company projects an average annual revenue of approximately $2.4 million per IT megawatt, with 3% annual escalators on both the lease and services agreement.

Bitdeer also projected an estimated net operating income margin of about 90% against roughly $500 million in remaining capital expenditures.

"We are thrilled to join forces with Volta in building a new generation of high-performance AI infrastructure, delivering leading-edge energy efficiency while creating opportunities for energy reuse and a circular economy," the company said. "Our ambition is to establish Norway as a leading destination for sustainable AI computing by combining world-class technology with local expertise and renewable energy."

Credit support and obligations

Bitdeer said Volta's obligations are expected to be backed by approximately $1.3 billion in letters of credit arranged by affiliates of JPMorgan and another financial institution. The company said it retains the right to terminate the agreement if Volta fails to meet milestones tied to the credit backstop.

Following the announcement, Benchmark Equity Research said the disclosure filled in the tenant identity and contract economics that investors had been seeking since Bitdeer's June disclosure of the Tydal lease.

Benchmark analyst Mark Palmer estimated the agreement could generate about $294 million in average annual revenue and roughly $264 million in average annual net operating income over the contract's life.

Palmer also noted that the anticipated $1.3 billion in letters of credit represents about 28% of the contract's $4.7 billion base-term value, or roughly four and a half years of average annual rent. He added that Volta retains a no-fee termination right after 10 years, reducing the firmly committed portion of the contract to about $2.7 billion.