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Explain how any other miner would buy mara under contract ,pre ordered rigs at 40% more than what they can buy them for somewhere else ?
Limp - it is not 'in my opinion'. The numbers he has used are simply wrong (easy to check for anybody doing just a little bit of their own research) therefore any conclusion he reaches based on them is not reliable.
I completely agree that any opinion as to the future is completely that and I clearly stated that ARB may indeed be in a better position than some (or even most) of the other miners - but that cannot be drawn from this report.
But actual numbers are a matter of fact and he has got his wrong. In addition there also a lot of numbers quoted that can't possibly be known accurately (like remaining machine spend) but they are stated as if they are.
So I think it is a shoddy piece of work, and that is an opinion but I can justify it alone on the grounds that it is full of factual errors - or do you really believe the direct cost to mine per BTC for ARB is really under $4k? Even PW doesn't believe that.
Excerpt from Bitcoin magazine last week -
“Prices for bitcoin mining hardware are closely correlated to bitcoin’s price for two key reasons.
For one thing, since hash rate generally follows or lags behind bitcoin’s price movements, the prices of bitcoin mining hardware — the source of hash rate — also lagging behind should be expected. The reason for this is easily explained: For example, when bitcoin is in a sustained downward price trend, some miners that are facing dwindling profits choose to unplug and even liquidate their hardware, which introduces more sell pressure on the mining hardware market.”
"Marathon may be forced to liquidate their BTC or sell those upcoming machine orders.”"
How can anyone sell upcoming rig orders. ?
When rigs prices have come down 40% from when these orders were placed.
In your opinion Hexam, you keep forgetting that. I happen to agree with the statement that reads -
“Mellerud concluded that Argo Blockchain was in the best position to survive while Marathon may be forced to liquidate their BTC or sell those upcoming machine orders.”
It’s about the future see, your calculations as I’ve stated before are interesting to read today, and as you’ve alluded to though you use certain “assumptions” for future numbers, totally understandable, no one can even begin to predict what’s happening over the horizon at the moment. As stated many times I strongly believe this is a Company who have worked at their own pace, built a formidable facility that will see them well into the future, and are well placed to reap the rewards of smart growth in time.
I’m not sure why you get so sensitive, just my opinion.
So Limp you're happy to believe a report based on total nonsense just because it agrees with your view? Funny how you didn't accept the equally laughable Boatman Report at face value.
“Mellerud concluded that Argo Blockchain was in the best position to survive while Marathon may be forced to liquidate their BTC or sell those upcoming machine orders.”
Nice to see others agreeing smart growth is the way forward.
Is it just me or does every post on this board attempt to induce a panic as to ARB's present situation?
If they diluted & sold their holding + spent all the cash they have in hand they'd cover themselves for $65m currently. Are their immediate liabilities more than this sum?
ARB feels about as binary a play as it can get. Bitcoin price goes up - ARB goes up. Bitcoin price goes down - ARB goes down. Number of buys grossly exceeding number of sells today. I've picked up an opening holding of 50k today - will keep adding sub 40p.
True - but something's gotta give. It must be in the accounts somewhere (as was dated March) and is too much to be all in non-current liabilities as they only total $23m (including some existing amounts)
One possibility is that they didn't actually take advantage of the whole loan but there is nothing to indicate this in the RNS that I can see.
Without more detailed info nothing is certain including that the Galaxy Loan is any higher than the $30m it was at year end.
Hexam, current liabilities only include those maturing within 12 months, hence the $58m of loans under current liabilities in Q1 accounts do not include the longer term equipment financing.
*sorry, $58m not £58m
The first NYDIG loan was agreed in March as per RNS on March 10th:
"As part of the Financing Agreement, NYDIG has loaned Argo Helios an aggregate principal amount of $26.66 million (£20.23 million)"
Therefore it will have been included in the Q1 accounts and if all shown under current liabilities it is enough (virtually) to bring the total to £58m.
However, the loans under non-current liabilities also rose (from $4m to $23m) and I cannot explain the reason for this but there is nothing to suggest it is due to an increase in the Galaxy borrowings above the $30m included at year end (which would likely be shown under current liabilities anyway).
The latest accounts for Argo are the Q1 2022 set which show loans under current liabilities of $58m. That does not include the subsequent machine financing agreed in May.
Rookie - What you posted was correct at the time but the plan was always to pay back some of that loan from money raised last year and presumably they did so as only $30m appears in the year end accounts and that I believe is the amount owed to Galaxy. As you say though it's unclear why the borrowing have gone up so much in Q1 (i.e. by more than the first NYDIG loan). The following is from the prospectus last year:
"On 9 September 2021, the Company entered into an additional $25 million term loan agreement with Galaxy Digital LLP (New Galaxy Term Loan) to finance the continued build out of its new cryptocurrency mining facility in Texas and other general corporate operations. The outstanding principal of the Galaxy Term Loan, in the amount of $20 million, was subsumed into the New Galaxy Term Loan, resulting in total borrowings of $45 million under the New Galaxy Term Loan. The New Galaxy Term Loan will mature on 29 October 2021 and the borrowing fee on the loan is 4.5% per annum...The New Galaxy Term Loan will terminate on 29 October 2021 or in certain other cases as specified in the agreement...The Company expects to repay £18 million ($25 million) of the principal of this loan with the proceeds of this offering and convert up to £14.5 million ($20 million) of the principal of this loan into mining machine financing upon receipt of machines and satisfaction of other conditions, with the repayment date for such financing extended beyond 29 October 2021 to a date to be agreed."
Rookie, you can't claim the article is wrong and then claim incorrect facts yourself. Look at the end of 2021 accounts for the most recent galaxy outstanding figure. I'm sure the truth is somewhere between the article and your thoughts.
https://cointelegraph.com/news/argo-blockchain-secures-25m-bitcoin-backed-loan-from-galaxy-digital
Re there are actually two loans from galaxy ($20m & $25m) reported to have been rolled up into $45m overall, backed by BTC: https://cointelegraph.com/news/argo-blockchain-secures-25m-bitcoin-backed-loan-from-galaxy-digital.
Current liabilities, loans and borrowings in the Q1 2022 release total: $58,618m - no breakdown was provided, logically that is exclusive of NYDIG equipment loans as they were only agreed in May 2022, Q2.
"Whilst I am throwing factual mud, also pay attention to the BTC equivalent figure in the last couple of monthly updates and the next one - going under the radar as focus is on terrible BTC output. They invested 10% of the their HODL in ****coins just before DEFI collapsed - what a brilliant laboratory."
Spot on, mentioned this many times.
Argo are in the worst position in this bear market. Terrible monthly numbers & losing a huge amount in btc equivalents.
Rookie, yes end of year accounts showed usd$30mil I think, not gbp£45mil that you reference. We will no doubt find out in the q&a the current status of galaxy loan.
Agree that the report is amatuerish and that ARB are in a precarious position regarding their loans and cash flow but where did you get $45m for the Galaxy Loan, as the end of year accounts quote this as $30m? Have they borrowed more since?
Thanks Rookie.
Excellent post and the reality. I cant believe people cant see this for what it is.
July update should be fun.
This is complete amateurish BS, which needs to be addressed.
The Q1 2022 results confirm $95m in current liabilities including $45m in loans from Galaxy which were collateralised against their HODL. We know from Bit Farms recent disclosure (they had a similar loan) that Galaxy require 140% collateral. So Argo needed to put up BTC worth around $63m - most of their HODL when BTC was above $30k. Guess what happened in June when BTC crashed to around $20k? The HODL no longer meets the 140% collateral of $63m. Galaxy then give payees 24 hours to put up more BTC (which Argo do not have) or to sell down the loan, partially or completely. So basic maths implies they have probably like Bit farms been forced this month to sell a significant proportion or all of their HODL. Unless they have somehow found someone else to lend them money. Unlike Bit Farms they have not been transparent enough to release an RNS on this and I suspect will wait until the middle of July to set it out in July update.
Then in addition to the £45m Galaxy loan they have $71m equipment loan with NYDIG that matures in April 2024, but bears 12% interest a year; which needs to be paid for.
They also need to raise another $50m financing to finish Helios phase 1, as per their investor presentation; answers on a post-card for how you raise $50m when you have already been forced to sell your HODL and have already financed your equipment.
Cash-flow is extremely tight, just $12m on hand end of Q1, last accounts.
Any mining analyst who thinks Argo is in the best financial position is insane, companies like HUT with zero debt and HODL over 7000 coins......ditto Hive, actually profitable with ETH GPU mix.
Argo is carrying a significant amount of debt and at current BTC prices the revenue / cash flow does not add up to meet their current liabilities; without losing their HODL - which is the exact opposite of what a miner is trying to do. That is the bottom line.
Whilst I am throwing factual mud, also pay attention to the BTC equivalent figure in the last couple of monthly updates and the next one - going under the radar as focus is on terrible BTC output. They invested 10% of the their HODL in ****coins just before DEFI collapsed - what a brilliant laboratory.
Argo might be able to pull it all together and reach their 2022 EOY aims of 5.5 EH etc, BUT they are left scrapping down the sofa for cash and the HODL is looking extremely vulnerable. That should be the take away.
the analysis is flawed. there are several metrics that are not correct / do not add up. Investors need to do their own due diligence.
https://threadreaderapp.com/thread/1541444212444614656.html
I believe that ArgoBlockchain is currently the bitcoin miner in the best financial condition. Argo has a strong balance sheet with little debt and strong operating cash flows relative to upcoming machine payments. Argo also has the second-lowest direct bitcoin production cost.