Member Info for HarChris

Now that rig prices have fallen so dramatically though any miner continuing to build their operations will be sharply reducing their break even price

For Argo currently it comes out at about $42k per Bitcoin mined.

Look at Corz for example... when they go under the administrators are going to sell their facilities and 15EH of self mining operations in order to claw back as much money as possible for the first-in-line creditors - do you think if Mara wade in and snap up a big percentage of that they are going to struggle to make a profit in the next bull run?

That's what we should be looking at now, who out of Riot/Mara/Clsk/Bitfarms/Hut8 are going to be the biggest winners in 2024.

What you can't seem to grasp AB is that all these mistakes pail in comparison to the benefit of having raised the most money in the bull market, that's all that matters now. Mara for example will be in the running for all the distressed assets that hit the market over the next twelve months, not to mention new machines that will be going for $1000 a pop soon. Investors should be looking at (i) who is definitely going to be here if the next bull run starts in 2024 and (ii) who's going to be top of the pile. For all your dislike for Mara how do they fare on those two points?

You're thinking way too logically rather than simply asking which company is going to look attractive when the next hyped up bull market commences. Traders will be jumping ahead to $100k BTC and wondering where that'll put each miner - Mara will probably have 18000+ BTC (= $1.8B at $100k) + be mining anything from 800-1500BTC a month depending on how the next year goes.

Stop treating this market like it's a legitimate business sector, it's not, it's the wild west!!!!!

'harl won’t recieve all the £1.6b which I feel new investors or day traders may think.. the amount Harl will get is game changing none the least'

Anyone that thinks that is an idiot, plain and simple. The fact remains that a substantial percentage of what is an absolutely ginormous contract will go to Harland and Wolf and at (still) just £30m market cap this has multiples left to go.

I'm not surprised that it didn't go higher today though, investors have been stung terribly on AIM for months now and probably don't quite believe that any share is capable of getting even close to what is fair value but I'm sure this will, in time.

glaring omission*

Back last year Argo were ahead of clsk and on a par with bitfarms but look at the difference in what they raised - $500m vs Argo's $130m nasdaq raise.

This sector is going to be pretty much divided simply by the ATM offerings... The earlier and bigger the ATM the better, those without one go under.

So from best to worst taking in amount raised, dilution and market cap:
Clsk $500m June 2021
Bitfarms $500m, August 2021
Riot $600m, September 2021
Mara $750m February 2022
Hut8 $200m August 2022
Corz $100m, July 2022 - too little too late.

+ Hive have completed three $100m offerings since October 2021

Digging down deeper into all these offerings, how much dilution has already taken place, how much more can still be raised etc will be a very useful way of distinguishing between each miner. Notice the blaring omission from that list? Argo.

If there's money to be made on miners it's when the 'death to bitcoin' ' no new bull market' scenarios start being priced in - something like <$7 Mara, <$2 clsk, <$4 Riot,

Chae I bet many of these loud mouth investors have already moved some of their bitcoin into the rising nasdaq tech stocks.

Debt isn't the issue for Argo right now, yes they took on that $40m debt which tallies up to $60m over five years but it's not due until 2026, that's a long way off. The issue is they are a high cost, low efficiency operation that has burnt through all of their bitcoin, they have flogged every bit of equipment they are capable of flogging and are burning through cash ever faster due to the collapse in bitcoin price - they have absolutely no bargaining power right now, they have already shown their hand and now have any incredibly weak negotiation position when it comes to raising funds on the open market.

As I said before there are three options right now for the management to decide between:
(i) attempt to execute a raise at 6p a share raising ~$10m by issuing 160m shares (increasing total shares in issue by 25%)
(ii) move early and mothball operations and survive a little longer on the funds they recently raised from selling machines
(iii) do nothing and hope bitcoin turns within the 3-4 months they can fund operations for.

(i) Gives them an extra three months cash runway (at current BTC price) and hence 6-7 months for bitcoin to turn, (ii) should see them survive but they would literally be hibernating and (iii) risks going bankrupt but acknowledges that neither (i) or (ii) is very bullish long term anyway.

Against such a miserable market backdrop this share is providing a wonderful relief. Topping up as much as I can and will wait to see how this all plays out in the coming weeks and months.

Right it seems you do sort of get it PI. If you think they need that much money to see them through the next twelve months you must also agree that without it they have very limited time left. So it's a race for bitcoin to recover (and therefore Argo share price to recover) before Argo runs out of cash...

Now if the latter wins out (Argo runs out of cash before bitcoin recovers) then the share price implodes and they can't be saved... or Peter moves now and attempts a placing at a discount to current price. It's one or the other, no one is going to support a placing today above the current share price.

Here's how I see it PI:

Peter understood the gravity of the situation and sensibly started working towards a package to see Argo through the next twelve months. The original plans were sound, a placing to raise $27m and additional cash from selling a few machines and a renegotiation with NYDIG. This would give twelve months runway and potentially some funds to continue expanding if bitcoin were to turn sooner than expected. This would also allow Argo to pay down the Galaxy loan and position themselves for the year ahead...

All good thinking. Where the whole thing fell apart was announcing the LOI at 27p, this collapsed the share price and led to the investor walking away. In response Argo then had to sell more machines and go back to the drawing board. Very troubling but still BTC $20k-$21k and flirting with going higher, all was not lost.

It's the last two weeks that steps things up a notch. After failing to get that placing away and with the share price cratering Argo were left badly needing bitcoin to show some strength, for enthusiasm and money to be returning to the space, for a share price rally that would provide a better proposition for raising cash yet instead the opposite has happened, bitcoin has tumbled and the bear market looks to be extended for the foreseeable future.

Don't get me wrong, I'm not necessarily suggesting Argo are going to go under in the next year, it's Core Scientific I've been banging on about definitely going under, but as things stand whether or not Argo goes under makes no difference to the investment case here, it's bad either way. They have the weakest of negotiating positions now, they have no chance of tapping the debt markets and they have nothing else to sell to free up cash so it's just a ticking time bomb. Either they mothball operations very soon and come out of hibernation at the end of the bear market (which will send the share price south) , they are forced to give a ton of equity away at 5/6p a share or they carry on as they are in the hope that bitcoin turns and if it doesn't, liquidation in spring 2023.

High risk/ low reward at current price.

What funding answers though? You can't leave it to the last minute with the industry in disarray and expect there to be investors willing to step in, it's unrealistic. I agree that the share price won't crater from here but as each week passes without a BTC recovery there will more and more who get nervy and decide to sell out to salvage something - I mean even PI was showing far less confidence yesterday, I suspect his selling alone would have this at 6p :)

I can't see anyone committing to save Argo at this point...this is survival of the fittest, if the weakest like Argo are temporarily propped up it just stretches and strains the whole sector even further.

Another day another 16800 dollars - BTC hasn't fallen as low as some of us thought it might have but in terms of Argo it's of little difference whether it's $15k or $17k... surely be hearing from PW soon.

In other words we aren't likely to see many miners simply mothballing operations, instead they'll go from mining at full capacity to insolvent in one fell swoop.

Whether or not new entrants get involved over the next six months will have a major impact too on the likes of Mara, Riot, Hut8, Clsk, they will be badly hoping that they don't so the total network shrinks / their market share balloons.

'Seems to be a game of chicken but doesn't look like anyone is considering moving out the way.'

We wondered a few months ago which miners would blink first then in a matter of weeks we heard from Argo and its need for further funding, Corz and its inability to meet debt obligations going forward and also Iris facing default on two loans. The same will happen soon, whether days, weeks or months, eventually the $17k level will cut too deep.

Inflation came in a fair bit lower than expected, nasdaq futures booming, bit of a chance for bitcoin to build up a head of steam I guess.

Cool, well that means they had even less bitcoin left at the end of October then, just 19. Those bitcoin will surely be sold off in the next few months in order to keep the lights on, now is not exactly the time to be 'innovating'