If anyone wanted to take this over I would have though they would already have done so given the MCAP is only £20m.
The Americans only want bleeding edge kit and most of the Canadians have no cash. Why bother with a takeover when you can buy 2nd gen kit from bankrupt miners at firesale prices just as Peter did with the ZEC miners? Maybe the data centres are worth buying? Maybe there's plenty of capacity. I don't know.
I think people are terrified of the depreciation and without deeper analysis most investors take a quick look at Argo and surmise that they are not making profits because they are caught in a kind of Malthusian trap where they are constantly mining and spending all their profit on new machines ad infinitum.
Argo do have their holding strategy to counteract this - 126 held BTC - but to date this has not swayed the market. A few months ago I suggested that 400-500 BTC would be enough to convince the market that Argo has escaped the crypto-miner's trap but who really knows? 126 smells of desperation to me. It's the kind of level that a troubled miner would hold to convince the market they weren't going bust. But what happens when you need to buy new machines, the market asks? Those 126 BTC will be gone overnight.
However you look at it the problem it can only be solved in one of two ways, BTC rising significantly or a dual listing in the US. That's my opinion but I would be interested if anyone here could illuminate me as to how Argo goes about it any differently? For my money it could take years to reassure London.
Of course if BTC rises then Argo will go up in step but what the SP really needs is some nice Fiat profits declared officially HY/FY to convince the technophobes in London that there is money to be made here. With the current strategy of using revenues to scale up the operation, London will be waiting a while for their booked profit. Meanwhile, in America, Robinhood investors are speculating on what Riot and Mara etc could be and sending their MCAPs sky high. This is a problem with the London market and not Argo's zero profit scaling up strategy. Indeed, in a less risk averse market Argo would be free to leverage much more aggressively than they currently do.
Looking at the stocko page Argo looks like a non entity with red all over the place, no analyst coverage and qualifying for no screens. Most investors would not touch this with a bargepole. Furthermore, they wouldn't even bother to research Argo further. A small positive today is the aggregate stocko score has risen to its highest ever - 27 (out of 100). So it's going in the right direction.
We talk about re-rates here and Argo needs one of three things to make this happen: 1. BTC rocketing towards $100k 2. Wait a few years to book a profit for the London dinosaurs 3. Dual listing in the US
In time I hope we will see all three but any one of these would be enough to send this to £1
I have overhead resistances from June/July last year at 13188 (tested last night), 13341 and 13853. Above those and we have clear sky to the big boy Dec 2017 and his little brother Jan 2018 - 19764 and 17213.
Not to mention the fact that our low valuation makes it harder to get leverage for extra machines. Riot already have plans for 2.3TH capacity. They can attempt to do that because the US market is less risk averse with regards to debt and their enhanced MCAP makes potential raises more effective. Early 2020 Argo were head and shoulders above Riot. By next year Riot will have overtaken us. The low London PE will have become self fulfilling and vice versa for Riot in the US.
It is not just whimsy why people like myself want a US listing. Every month in London we lose more potential capital growth.
It's a four year cycle and we are entering summer. Absolutely crazy to sell until at least November 2021. Very easy to hold this for another year given likely newsflow and when governments across the world are printing Fiat like its 1920. Weimar anyone?
HODL BTC for $100k minimum this cycle HODL Argo for £1 minimum this cycle HODL Riot for $100 minimum this cycle
With Sterling, 75% of new money is created through mortgages secured on the UKs housing stock. I am sat here wondering how much more money UK Gov will throw at the housing market to keep it afloat. Surely a devaluation is on the cards with debt-to-GDP above 100% and rising fast? Last week I heard they were mulling over negative interest rates on savings accounts. Not sure any of this is bullish for Sterling. No wonder Bailey is bulls.ihting on Bitcoin. I sincerely hope these rentier scum get their comeuppance before they suffocate the whole country.
We recently increased the number of ZEC miners so our BTC-e should increase at least for the next few months. Actual BTC may decrease owing to difficulty increases but combined BTC and ZEC should be up.
They do have some wiggle room in their loan agreement. If bitty falls they can increase the interest rate. And 3000 BTC is a lot to be hodling. I still they have a garbage mining setup but they do offer a unique proposition to North American traders who are not averse to risk. The main reason why I would avoid them now is their high MCAP - $200CAD. Their bitcoin is already priced in at $60k.