Member Info for HarChris

Yes I am aware. My argument is simply that failure has been largely priced in now but even 'failure' doesn't result in the business going under or getting into serious financial difficulty. I don't believe that just because novacyt have performed so badly in this first six to twelve months under DA that there is no hope for him or the company but I understand many don't believe it's possible and I'm sure they have sold or are selling now. I'm speaking to those that are still here I guess.

'So shall we wait here until 2027 just to see what happens? I’m not sure I could listen to another 5 years of Valju.'

You're more than welcome to exit your position whenever you want!

Of course, not pretending this is a guarantee or anything like that but we have chances that other small caps simply don't and that counts for something. Mistakes can be made and still, fundamentally, the company is where it was before, the disappointment is that it hasn't kicked on. For others with debt and liabilities a mistake as big as choosing the wrong CEO will almost certainly be terminal.

I don't know B2HS2L, that would be my guess.It could also be that a sizeable amount of the cash is tied up because of the DHSC dispute and for now the focus is on improving operations in house before really attacking on the m&a front.

Having said that if you'd asked me six months or so ago where we'd be today I would not in a million years have predicted things would have got so miserable so quickly. I expected a lot more and thought we'd have seen M&A activity and would have announced a couple of reasonably sized contracts by now. So it's clear that I don't have a clue but the fact remains there is too much cash and potential for this investment to be written off as a failure - money talks, especially with the global outlook so bleak currently.

If revenue fails to pick up this year AND the cash pile starts dwindling then we are in a little trouble and will start to rely on winning the DHSC dispute but there's a lot that can still go right whilst we focus on the worst case scenarios.

It's definitely a combination of poor operational performance and the wider market uncertainty. In 'normal' times it would be extremely hard to find companies that are valued below their NAV besides special circumstances (almost always biotechs) but now I could name four or five straight off and there are plenty more than that.

The market, especially small cap Aim stocks, has become incredibly short term thinking. For now it's not looking any further than it's nose and if there's no positive catalysts immediately ahead, if there's any chance that the next bit of news good be negative think another poor trading update in a few month's time for example), then the share price falls further or stays deflated no matter the valuation.

In reality, despite the failure to kick on this year and prove that novacyt are ready to thrive post-covid (whilst still generating revs from covid), there is still enormous value here. We know this is a sector that is growing, we know medicine and testing is becoming ever more personalised and moving into the home, something ncyt are well prepared to take advantage of, we still have those links with the world's biggest NGOs etc Even if DA fails to turn it around we should still have tens of millions for a new CEO to come in and turn it around.

Obviously we are not down here at 105p because of the market alone and imo the bigger reason is the failure of management however all the time the cash in the bank remains high there is months and years to turn this ship around. All is not lost yet but it's sure been a painful journey up until now!

I know a few of you on here are fans of Clean Spark so can you answer me this... why is CLSK at 52 week lows when the rest are at least a good 10% above and some as much as 100% off lows? Anything happen recently to cause it?

I was the one suggesting PW should move first and get a placing away as quick as possible - do it now, as heavy as you can, say £40m raised and not only does it guarantee survival through the bear market it also frees up funds to start buying the now much cheaper rigs on sale.

"Mara has no loans to the best of my knowledge either, finding the miners with no debt and no skeletons in its cupboard is a game in itself."

I think some would read that as all their funding having come from equity raises and placings and hence they have no debt and nothing to pay back - it's potentially true if these shares are converted at $76 a share but if not they will have to come up with a very large amount of $725m.

But yeah we can certainly say that that CLN is an impressive deal and they have no meaningful short term liabilities and that is what matters most at this stage, will definitely have no trouble riding out an extended downturn in BTC price unlike many of the other miners.

Thanks. So whilst it's not true that they have no loans to pay back it is true that none of that needs to be paid back til 2026, if at all depending on bitcoin.

Yes that does look like a great deal and gives them years for bitcoin to recover.

In other words it's a very good deal but they still need to pay back an enormous amount in the future if it doesn't hit $76? So it's a bit misleading to say they have no loans to pay back...

'It was a World class raise and the best part is if the price doesnt hit that conversion rate of 76 bucks, thats just the way it goes!'

You're trying to argue that is the share price doesn't hit $76 they don't have to pay it back? Rubbish surely, it means it needs to be renegotiated, they have to pay the amount back in cash or they convert at a lower price and take more shares...

Are you sure that's how it works Hexam? I know some CLNs are set at a certain price and others at a specified date... surely Marathon will either be converting shares or paying that enormous loan back in full? Neither strikes me as a wonderful outcome.

I still think the more ridiculous situation is one like Core Scientific's... how on earth have they managed to get into a position of mining over 40BTC a DAY with a market cap under $600m - that's certainly not smart growth.

Aren't we talking a potentially massive dilution further down the road when these are converted into shares? This will likely turn out to be much better for Marathon than taking on 9% loans but that's just the way it's happened to play out.

PW's pally relationship with shareholders meant he could no longer go down any dilution route, raises or CLNs so in reality he was backed into a corner and instead will be forced to do them further down the road at a (likely) much lower price.

Good point Wilson. Having said that this acquisition highlights just how badly novacyt has performed in the first six months of the year.

In 2019 with such modest resources available to them and a debt that was increasingly looking unlikely to be serviceable, ncyt pulled in revenues of £11.5m. In the first six months of this year revenue was £16.5m so on that basis should be ~ 3 times 2019 but that was inflated somewhat by omicron sales at the back end of last year. The most recent quarter fell below pre covid levels once you factor out the estimated amount derived from IT IS. That is quite a remarkable statistic.

This could still easily be a £0.5b+ (£7+) company within a couple of years but whatever has gone wrong over the last three months really needs addressing fast.

Whilst I haven’t hidden my frustration with how badly the company are doing currently at converting this opportunity into revenue it’s also worth noting that they may have dodged a bullet currently in regards to M&A. Small caps are being revalued sharply downwards and the risks and threats of insolvency are ever increasing as i.rates accelerate and accessed to credit is tightened.

IT IS was acquired for £10.1m (+ some performance based interest) with 2020 expected revs of £5m + profitable. This was at a time when pharma was ‘hot’ so imagine what ncyt May be able to acquire in the months and years ahead?

My guess is £100m of revs is possible from M&A alone not accounting for DHSC dispute outcome.

I agree FP, they will always front run especially with such beaten up share prices, I mean Hut8 just rose from 1.69CAD to 2.98CAD (76%) in the space of two weeks with bitcoin merely going from $19k to $24k (26%).

But miners could also go to zero in the next year whereas bitcoin has no chance of that. Risk/reward is good but they are under pressure and they won't recover in one piece if bitcoin stays deflated well into 2023.

You say that Flowerpot but in a couple of years time these miners are going to be fighting over just 450 coins a day / 13500 a month. It's assumed that bitcoin will rise to offset that loss in earnings and heavily inflate the miners' assets.

Now we might be talking about doubling next to nothing.

'Thanks Hexam, btc needs to rise fast to save a lot of these miners.'

Does it? Loss making won't put most out of business unless it goes on for much longer. Take Argo, the loss they are currently making has been absorbed by shareholders and institutional investors in the nasdaq IPO ($128m@$15 a share) + the placing (£27m @ £2 a share), they are effectively the loss makers. Argo have taken on debt ever since which may become a big problem further down the line but I think the statement should be more 'btc needs to rise fast to save the most indebted companies'

I highly doubt that we'll see 300EH unless bitcoin really goes on a tear - with bitcoin falling back into its usual cycle and with depressed/lower prices expected for some time to come, maybe years, it is no longer a simple one dimensional race to acquire hash for miners, instead varying strategies will be employed with enough cash left aside to deal with sharp downturns if they are to occur again.

At this bitcoin price global hash rate should continue to descend gradually downwards but the tipping point might be about 140EH where hash no longer falls due to machines being bought from the distressed as well as rigs falling in price far enough for new entities to enter the market.

Not sure if it was mentioned here amongst all the nonsense but bitcoin saw its biggest bitcoin downwards adjustment in some time - minus 5% - and 10% down over the past month.

Amazing to think we all had a minimum of 300EH pencilled in by the end of the year for our calculations.