Member Info for HarChris

Anything that keeps Argo in business in full operation for 12 months is obviously excellent for them but everything discussed here would just not be worth it for the counter-party. There are risks such as the difficulty accelerating or issues with machines that could suddenly see Argo merely mining 120 a month and unable to return the 1800 agreed (Hexam's example)

No on those sorts of terms another party would be much better off just buying bitcoin themselves at $17k but I suppose there's a point (again giving away some of the company or assets) that would potentially be desirable to a counter-party. But however you swing it Argo has a weak negotiation position and therefore unable to pull off an impactful deal that prevents the company being permanently diminished.

Ha i bought on open too but it's not my usual kind of trade and so I bailed out fairly soon after for not much more than beer money. Felt too out of control despite feeling it probably goes higher before the week's out.

Keep an eye on Mara though, it keeps tanking and should be $4 soon.

I said I believe that they will be able to acquire their way to a valuation many multiples of where it is now, I didn't say I am confident they'll manage it successfully. I mean they'll be able to acquire businesses over time that total hundreds of millions of revenue... Why? Because decent small caps *will* be fighting for their lives soon if the recession reaches the depths that the BoE are predicting, otherwise solid companies will be on their knees. It's only just started and yet I'm seeing companies across AIM taking any funding they can on whatever terms they can get. I'm sure the same will be true of non publicly listed companies too.

If you don't have the funds to operate you aren't worth much, novacyt are in an enviable position now. Do I trust the board to spend the money wisely? Not necessarily but the opportunity is only going to get bigger in the months and years ahead.

I'm confident novacyt will be able to acquire their way to a valuation many multiples of where it is now even without any organic growth. We're entering very difficult times and in a high interest rate environment (especially one that has risen at such speed), cash is worth its weight in gold and debt is a potential death sentence.

I've been stressing for nearly a year that when the economy turns and funding becomes extremely difficult to acquire and only on very rough terms novacyt's cash-rich debt-free position is going to look ever more rosy.

I think we're entering the 'economy turning' phase now.

Chae, do you think the P&D will be affected today by bitcoin creeping lower once again?

Yep I suspect the biggest pump and dump coming, might play out over a few trading days though.

Tempted to try to nip in and out but sure is risky.

You willing to pay $0.50 when the market opens? Good luck! Agree it could go crazy but I think the proposal will be rejected and they'll be in administration shortly.

B Riley are not only last in line creditors to receive anything from liquidators but they are also significant shareholders (which are even further back in the pecking order). So when they say bankruptcy would be a disservice to shareholders they are talking about themselves! Talk about self interest dressed up as altruism.

Again from the article:

'Still, the company has an equity purchase agreement allowing it to sell shares worth up to $100 million to B. Riley. Until now, the company has only sold shares worth $21 million, meaning that they still have $79 million left of firepower from this facility. '

Well isn't that interesting? B Riley have already staked this money, it's just they know there's zero chance of keeping Corz afloat so they now put out this proposal attempting to seem like they are stepping in to try and save them.

No they haven't said here's another load of dough, it comes with conditions and is merely proposed. As it happens they have an ATM with B Riley in place and this I believe is the money they have left to draw (by issuing shares) but B Riley are trying to sort much better terms for themselves (instead of Corz issuing those shares and then going bankrupt they are trying to make a deal with other creditors).

This is a last ditch attempt from B Riley to potentially salvage something, I suspect bankruptcy will be announced before Christmas.

Unless there's a different Telegram group then that's total nonsense, it's a very quiet group with barely more than 10 or so messages a week.

I think we essentially agree, I'm saying it's nonsensical and there's no chance that the top creditors are going to accept this. You've got option (i) receive full or close to full remuneration through administration via machines/facilities or you've got option (ii) let Corz just continue mining at full operation, wearing down the machines for up to two years longer (which will need replacing soon after that point) and even then potentially bitcoin going to $15k and still running out of cash far sooner.
Notto mention all manner of other issues that could occur to make finances tighter.

No they'll obviously take hold of the assets whilst there's assets to take hold of.

But Corz do have enormous assets, that isn't their issue. I think those creditors get a lot back as things stand. In that article I linked they valued the machines at $255m and a facility value of $320m. The conclusion to the article is that the equipment finance lenders will be repaid as well as the secured convertible note lenders however the unsecured convertible note lenders won't be fully repaid and B Riley will get zero.

I'm not saying it will play out exactly like that but I find it interesting that it's the last in line getting zero that is making out that's it's morally essential to keep Corz afloat.

Yeah that's true but you'd expect that Hexam, most of the miners are still generating cash/at least close to cash cost breakeven at this level and Corz has enormous scale. Even in B Riley's calcs they're assuming slightly higher bitcoin rather than lower.

How they'll ever make enough money to pay back a billion dollars is the question though (they won't).

Yeah that's exactly what I'm saying. Not that NYDIG are going to be simply handed all the assets by the administrators but unlike B Riley/ Corz they are first-in-line creditors that will see some sort of return given liquidation at this stage. Preferable to taking on more risk by bailing Argo out.

And Hexam my point re B Riley is that the proposal is absolutely absurd, those equipment finance creditors have first dibs on Core Scientific's enormous assets, of 14EH/s of machines and 7 data centres. They *will* see a return, it's the convertible note holders and Bridge Note (B riley themselves) that aren't going to see a return.

This will fall flat on its **** I'm sure of it.

Yeah the proposal from B Riley is nonsense in my opinion, the equipment financing creditors aren’t going to agree to it

Well they have $17m in monthly loan repayments.

They had 8058 bitcoin by end of May yet by the end of October just 62 left. November they stopped reporting.

Can't get my head around how B Riley thinks $72m will keep them going for that long, must be some other tactic at play here.

Go with this as a starting point:

https://hashrateindex.com/blog/under-a-mountain-of-debt-analyzing-core-scientifics-current-situation/

In early October Argo were trying to amend their existing deal with NYDIG in order to release an extra $5.7m of funds, this hasn't been executed so we can assume NYDIG are not interested in bailing Argo out.