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The company has options too as it’s selling all its bitcoin currently. Once capex is covered and if BTC prices remain low it can just hold onto some BTC and sell them at higher prices. The $6000-$7000 range is ideal for ARB whilst it ramps up machines. I expect BTC to hit above $20k next year and thats when the cash will roll in quickly. After halving most miners will be killed off with prices below $12k. My target remains 25p for now.
The Good News is the Hashrate is now seems to be dropping significantly just as we are installing new machines.
I suspect that doubts about the longevity of its operations are also a reason why traditional PEs don’t really apply here - you have to maintain that level of earnings for a long enough period of time to justify the price/valuation. It also needs to prove that it can generate enough free cash flow to return money to shareholders via dividends as well, not just keep ploughing it back into Capex in new machines indefinitely. Personally I see value here though and am a holder myself with a 5.5p average, and am viewing it as a leveraged play on Bitcoin price, as well as the fact it has taken a hammering of late.
1 pound next year is most definitely doable
http://www.alignresearch.co.uk/argo-blockchain/argo-blockchain-still-highly-profitable-at-current-bitcoin-prices/
The cash we are throwing off is not accounted for in the SP. A pe of around 8 gives us £1. Unfortunately the market is not valuing us on traditional metrics it ties us to BTC and sees BTC bearishly and with more risk than those invested here. It’ll correct just a case of when.
Ps, I had a great day at TXP, also still way undervalued imo.
Trek
£1
Think we are all hoping for far more than 100% rise next year !!!
Trek - would you like to divulge a little more? Why do you think this will do 100% in 2020? Cheers
"Serious question - do people who know about this stock think it will multibag this year?"
Next year
Trek
£1
Serious question - do people who know about this stock think it will multibag this year?
Sure don’t feel like main market. Looks like a blue finish today against the BTC trend, won’t be surprised if the MM gap this up cutting out middle buyers, stretches the spread and the difference is theirs. House always wins!
Trek
£1
I am not sure, if all the markets start to drop will then Bitcoin and Gold rise to hedge against this ?
Surely that's correct. Once equities come down, gold and btc will rise no?
Confused as to why Global stocks are at all time highs esp Dow Jones and s and p 500.
And yet Bitcoin is so Subdued.
' Any shrinkage will make it hard if not impossible for any large or institutional investors to buy.'
I'm not worried about new investors who would have to pay a premium, that's something for another day and not really a concern, the share price may then reflect true value.
Ref share buy back I think I have posted before... whilst I too like the idea of a share buyback I am not sure about practicalities.
There are relatively few shares issued for a main market stock with such a low market cap.... and we know that close to 30% of shares are in the hands of a management related concert party. With significant numbers also held by tight holders the floating shares are already small in number. Any shrinkage will make it hard if not impossible for any large or institutional investors to buy. Both due to lack of available stock as well as general lack of liquidity.
But that's not to say that authority to buyback and a public intent might be enough to draw attention to the undervaluation and boost the sp - without actually buying any.
Happy to see all the negative sentiment here. Signals a turn very soon. If BTC remains at this price until the halving ARB will have generated some serious profit of £5-8m. I’d rather the company start a share buyback program instead of a dividend to send the SP back up to where it should be.