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How do you calculate the current price/earnings as a ‘realistic valuation’ compared to other miners? It seems wildly undervalued on the same measures

"BTC would have to fall below $5,000 before ARB would need to consider switching off its miners."

This is also a false expectation. ARB's real costs are considerably above this, like they are for other miners. It just depends what you include or exclude from the calculation. Yes, Argo is very competitively positioned to survive bear market conditions and yes, other miners would go to the wall before Argo, but these kind of figures aren't realistic (probably by a factor of x3 ?). Then again, BTC is not going anywhere near $5k and I doubt much under $40k so it's hypothetical.

"if Helios is going 30% in June and full capacity by August Argo may accumulate up to 6000+ bitcoin in reserves"

that's a false expectation, it's not going to happen and isn't planned as far as I can see. The interim target is for 100MW in phase one and 200MW in phase two. Argo's current mining power is around 1.7EH for around 50MW. New machines are already on order to more than double that to 3.7EH this year (so maybe +50MW), other machines might also be in plan (e.g. second hand machines), we might move existing machines from the Core Scientific pool to Texas so they can be immersed and overclocked (gaining more hash that way). The point is, just focus on the fact that we're going to double our existing hash and that's already in the bag. There may be more and there is capacity to go far beyond that. The rate of growth is much more relevant to forward P/E than the headline number. Argo's rate of growth exceeds that of competitors (even if it's overall hash power doesn't). It's trading way below value relative to other miners.

I agree with your analysis Adele, although I doubt it makes a difference :-)

BTC price was always trending towards 40k from the ATH. It took a small detour up and down again, but it bounced hard off the enormous liquidity that sits around that point. The bull-bear battle is much more about regaining $43k than consolidating $40k. If there's a breakout from there it will likely come in the final week of this month (21-28th). A lot will depend on whether new retail demand kicks in at that point.

Yes, but the profit margin remains negative (-323% in 2020, around -166% in 2021)
Operating cash flow is negative
The only positive asset balancing the books has been shareholder equity (£2.6m in 2021)

That’s the underlying difficulty here. Share consolidation makes sense in isolation and could be well timed if there was good news, and a fresh start, but unfortunately it’s just been the same old failure to meet operational objectives over and over again. Remuneration ought to be linked to performance. Performance continues to be poor. Consolidation is only needed because the share has been run into the ground to pay costs without results. It could work if there are also Board changes to give market confidence.

First phase of Texas should more than double current hash, plus the over clocking bonus from immersion rigs. Hopefully that at least balances increased difficulty so we might expect at least current mining rate in 2022 overall.

‘top heavy’ in what way? It’s currently trading at very low PE ratio relative to sector. It’s just posted production figures in excess of expectation. It’s on schedule in building a new site and it will more than double its hash again this year.

Thanks Adele, I agree with your analysis of probabilities, continued consolidation/accumulation in current range $41-45k until maybe 21 January with the possibility of a break out towards the end of the month (if there is enough renewed retail demand to drive above $52k), otherwise more crabbing

currently good support at $41k, as there was in the previous wave in September. This seems to be a floor price where whales are happy to accumulate but will depend on retail demand as to when it takes off again.

S&P 500 e-mini futures and Nasdaq futures are both up

that should read 8 x adjusted P/E

Not that much new really but usefully sets out the cash, asset, revenue situation, and modelling assumptions, which may help those who may have misunderstood some of these.

I think it's a reported c.10% drop from Khazak miners not from the global hash rate

ARB 2021 performance exceeding previous estimates, currently trading 2.5 x EV/Sales, 3 x EV/EBITDA, or adjusted P/E. Confirming net cash (debt/equity) position in 2021, and leading to valuation of 270p by 2023, on BTC price assumption of $50k

Global hash rate is public data so it's easy enough to monitor. Overall it's been climbing to all time highs, although the Khasak miners seem to be down a bit https://www.blockchain.com/charts/hash-rate

yes, a lot of people seem to miss this, the % margin on overclocking looks likely to be more than this plus a substantial discount on machines for immersion which would be beyond warranty.

yes, agree on the spread. The MMs will continue to make money for sure. Just a gentle observation that we should always be more loyal to our capital than our shares. Selling on spud and buying back in now would have been worthwhile, as it often is.

you might be right

"don’t sell, because nothing has changed"

Nothing apart from the SP steadily dropping. Sometimes selling makes sense even when you have full conviction in the investment, provided you believe you can buy back in lower. Risky game of course but there's no moral authority in holding a share that is decreasing in value. I guess it depends on your average and your timescale for investment.

Sorry, I should have said no significant debt - the Notes, for redemption in 2026, are for $38.6m, against monthly mining revenue of around $7m (at current BTC prices), a hodl of 2,500 BTC and the completed property in Texas. It's not exactly pushing the boat out, compared to some competitors. BITF have just taken another $100m loan from Galaxy, MARA has similar credit facility. The $100m BTC backed loan facility offer to ARB was never taken out. At these low BTC prices, ARB remains in a more liquid and resilient position than most miners currently.