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Exactly. And London doesn't like it either way and will also hinder us leveraging more aggressively to boot. Lose, lose, lose.
Damned if we buy new machines.
Damned if we hoard bitcoin
Damned if we leverage
It's (almost) a no win situation in London.
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
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.
Just think if we get a dual listing in America that PE will also expand.
$200m x PE of 30 equals $6bn. PE 50 = $10bn. Etc up to potentially 100 (unlikely though)
That's the main reason I want a US listing. I don't think London will be able to provide that kind of PE expansion. What is Argo on at the moment? Barely 4 PE? There's so much room for growth here.
https://www.lookintobitcoin.com/charts/1-year-hodl-wave/
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
HODL HODL HODL for the win.
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.
I think it's the exchanges offering 100x leverage that are the problem. They are controlling a huge amount of capital and are known to be market manipulators, apparently. That's the interesting thing about the Diginex reverse takeover of JFK and their "Tegridy Exchange", Equos. What's it worth being the first publicly listed, fully audited and regulated crypto exchange on the market?
Answers on a postcard.
On this board my main interest is the stock market and to call an 11 year bull market a short term bubble is wide of the mark. Trump sets himself up as the defender of the stock market as highlighted in his White House briefing last night so it's likely he will do anything to keep it inflated which is all I care about on this particular board. The point stands that the risk of a market crash is apparent after the election whatever your politics are.
I'm looking for a staircase up 1k per month between now and year end based on the futures market call options pushing out. I would expect this to trade between 11k and 12k for another few weeks, then 12k and 13k etc.
https://www.deribit.com/main#/options?tab=BTC-28AUG20
These are just the foothills and I'm not anticipating any fireworks until next year.
The main risk is that the market dumps if the Americans elect Kamala Harris and bitcoin goes down with it. In this scenario 6.5k will be the top up level. Keep some powder dry just in case.
We have started moving up. Peter Wall's buy in was the bottom. There's a lesson in there for the BOD. Now we need to pay off the Z11s then in my opinion, and notwithstanding the availability of cheap second hand machines from newly bankrupt companies, we should hodl for a few months until we have 500 BTC and BTC-e (ZEC).
Then we have no debt, an efficient and diversified mining set-up and a Hodl pile. What more could the market ask for from a crypto miner?