Ault & Company, Inc. Announces an Increased Majority Stake in Hyperscale Data, Inc.

Rhea-AI Summary

Ault & Company has increased its controlling stake in Hyperscale Data (NYSE: GPUS) to 91.7% of beneficial ownership as of January 3, 2025. The stake consists of 13,900,765 shares of Class A Common stock, including direct ownership, convertible shares, and warrants.

The increased ownership includes Class B Common stock received as dividends and recent purchases of Preferred Shares. Hyperscale Data is transitioning to become solely an owner and operator of data centers supporting high-performance computing services.

The stake comprises 8,249 shares of Class A Common, 4,234,561 shares convertible from Class B Common, 9,140,771 shares from Series C Preferred conversion, 88,494 shares from Series G Preferred conversion, and 428,690 shares from outstanding warrants.

Positive

• Increased controlling stake to 91.7% demonstrates strong investor confidence
• Strategic transition to focus solely on data center operations and high-performance computing
• Company received dividend distribution in form of Class B Common stock

Negative

• High ownership concentration (91.7%) may limit stock liquidity for other investors
• Complex share structure with multiple share classes and convertible preferred stocks

Insights

Financial Analyst

The increased majority stake acquisition by Ault & Company in Hyperscale Data (GPUS) represents a 91.7% controlling interest, significantly consolidating ownership. This complex transaction involves multiple share classes and convertible securities, including Class A Common, Class B Common and Series C and G Preferred shares. The structure suggests a strategic move to maintain tight control while potentially preparing for future capital deployment in data center infrastructure.

For investors, this level of ownership concentration presents both opportunities and risks. The strong backing from Ault & Company provides financial stability and strategic direction, particularly valuable in the capital-intensive data center sector. However, the high ownership concentration may result in reduced float and potentially lower trading liquidity for minority shareholders.

The transition to focus solely on data center operations for high-performance computing aligns with growing market demand, particularly given the surge in AI and machine learning applications requiring substantial computing power. This strategic pivot could position GPUS to capture value in a rapidly expanding market segment.

Tech Infrastructure Specialist

The transformation of Hyperscale Data into a dedicated data center operator for high-performance computing services represents a strategic alignment with current market demands. Data centers supporting AI and machine learning workloads require specialized infrastructure and command premium pricing compared to traditional colocation services.

The timing is particularly relevant as the industry faces unprecedented demand for AI-optimized data center capacity. By focusing exclusively on this segment, GPUS could potentially capture significant market share in a high-growth sector. The consolidation of ownership under Ault & Company could accelerate decision-making and capital deployment for critical infrastructure expansion.

This specialization in high-performance computing infrastructure positions GPUS to potentially benefit from the ongoing AI compute demand surge, which shows no signs of slowing. The strategy to focus solely on data centers suggests a clear understanding of where the market is heading and the infrastructure requirements needed to support next-generation computing workloads.

LAS VEGAS, Jan. 07, 2025 (GLOBE NEWSWIRE) -- Ault & Company, Inc. (“Ault & Company”), today announced that it has increased its controlling stake in Hyperscale Data, Inc. (“Hyperscale Data”), a diversified holding company transitioning to becoming solely an owner and operator of data centers to support high performance computing services. Hyperscale Data trades publicly on the NYSE American under the symbol GPUS. This acquisition reinforces Ault & Company’s commitment to investing in emerging technologies that shape the future of data infrastructure.

As of January 3, 2025, Ault & Company beneficially owned 13,900,765 shares of Hyperscale Data’s class A common stock (“Class A Common”), which represented 91.7%, as calculated in accordance with Section 16 of the Securities Exchange Act of 1934, as amended. This included 8,249 shares of Class A Common, 4,234,561 shares of Class A Common issuable upon conversion of class B common stock (“Class B Common”), 9,140,771 shares issuable upon conversion of 50,000 shares of series C convertible preferred stock (“Series C Preferred”), 88,494 shares of Class A Common issuable upon conversion of 495 shares of series G convertible preferred stock (“Series G Preferred” and together with Series C Preferred, the “Preferred Shares”) and 428,690 shares of Class A Common issuable upon exercise of outstanding warrants. The increased beneficial ownership included the receipt of Class B Common as a dividend to all stockholders of Hyperscale Data, as well as recent purchases of Preferred Shares through January 3, 2025.

“Increasing our majority stake in Hyperscale Data aligns with our strategic vision to expand our footprint in the data technology sector,” said Milton C. Ault, III, Chief Executive Officer of Ault & Company. “We are excited to contribute to Hyperscale Data’s growth and leverage our resources to enhance their capabilities.”

The transaction highlights Ault & Company’s active pursuit to enhance its portfolio with investments in high-potential technology-driven enterprises. Hyperscale Data is poised to broaden its service offerings under the strategic guidance of Ault & Company, focusing on delivering enhanced data solutions to businesses.

For further details on Ault & Company’s ownership of Hyperscale Data, please reference the Schedule 13D/A Amendment No. 9, filed with the U.S. Securities and Exchange Commission on January 6, 2025 by Ault & Company and its affiliates.

The principal business of Ault & Company is investing in securities. Ault & Company, together with its affiliates (including, Milton C. Ault III, Hyperscale Data’s Executive Chairman, William Horne, Hyperscale Data’s Chief Executive Officer and Vice Chairman, Henry Nisser, Hyperscale Data’s President, General Counsel and Director and Ken Cragun, Hyperscale Data’s Chief Financial Officer).

This press release is for informational purposes only and shall not constitute an offer to buy or sell common stock or any other securities.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as “believes,” “plans,” “anticipates,” “projects,” “estimates,” “expects,” “intends,” “strategy,” “future,” “opportunity,” “may,” “will,” “should,” “could,” “potential,” “considering,” or similar expressions. Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on current beliefs and assumptions that are subject to risks and uncertainties. Forward-looking statements speak only as of the date they are made, and Ault & Company undertakes no obligation to update any of them publicly in light of new information or future events other than as required by applicable law. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors.

Ault & Company Investor Contact
ir@aultandcompany.com

FAQ

What is Hyperscale Data's (GPUS) new ownership structure after Ault & Company's increased stake?

As of January 3, 2025, Ault & Company owns 91.7% beneficial ownership of Hyperscale Data (GPUS), consisting of 13,900,765 shares through various share classes and convertible securities.

How many shares of GPUS does Ault & Company control through convertible preferred stock?

Ault & Company controls 9,229,265 shares through convertible preferred stock, with 9,140,771 shares from Series C Preferred and 88,494 shares from Series G Preferred conversion.

What is Hyperscale Data's (GPUS) new business focus?

Hyperscale Data (GPUS) is transitioning to become solely an owner and operator of data centers supporting high-performance computing services.

How did Ault & Company increase its GPUS ownership stake?

Ault & Company increased its stake through receiving Class B Common stock as dividends and recent purchases of Preferred Shares through January 3, 2025.