Member Info for Hexam

“Argo Ceo ....a week ago .....uses word transformational.....You have to ask the question......in relation to what?”

No, I don’t, as I’ve been invested long enough in ARB to know that they are very fond of the word ‘transformational” but the only thing they’ve managed to transform lately is the sp all the way down from £3 to 10p.

The increase in fees is the far more plausible reason as this is something that is factual and has helped all miners (not just ARB) plus has been mentioned as improving numbers in other miners’ updates.

As for ARB being ‘small and nimble’ it is small but certainly not nimble as it is hamstrung by a lack of cash and an abundance of debt.

I think you are trying to make something out of nothing.

"Interesting that Argo just released some very good mining figures ? If you ran a trial how many machines would you use ? Could be completely unrelated and a coincidence?"

Probably just due to the increase in transaction fees. Other miners are reporting good numbers with some (like CLSK and BITF) producing at more than 100% efficiency (i.e. more than their share of the global hashrate suggests they ought to be able to mine). ARB by comparison is still at around 90% despite the improvement this month.

"Where did the 45-50k profitability figure come from?"

The latest quarterly accounts. The all in costs for mining BTC can readily be calculated from those and for Q1 was $41k, Q2 $48k and Q3 47k.

Split of Q3 cost per BTC mined:

Direct mining: $12k

Depreciation (non-cash): $17k

Admin etc: $8k

Share based comp (non-cash): $2.5k

Interest: $7.5k

So comfortably generating cash, not generating profit.

Difficulty still rising so these costs will keep rising unless they can find efficiencies elsewhere (like they did in Q3).

The lack of detail is odd given that this is their best mining performance for over two years - if not ever - but I suppose it's simply down to the higher fees recently? Otherwise you'd expect them to be shouting their performance from the rooftops.

As to profitability they are still not close to that (need at least $45k and maybe $50k BTC) but they should comfortably be generating cash (assuming they are not investing in new machines) so most likely they are unprofitable but clearing debt!

I think I'm being somewhat misrepresented (and misspelt). I basically said IF there is deal news AND it is based on the 2.6x being validated then the sp should be at least 100x what is now based on the sort of revenue it is likely to generate - which suggests to me that the market must think it's very long odds that it will actually play out that way (otherwise the sp would already be a lot closer to £1.80 than to 1.8p).

In other words it's a very high risk stock with extremely high rewards should the gamble come off - but the market currently views those chances as very slim (not the near certainty that some are making out). Still, longshots do very occasionally come off so good luck to all those having a punt.

My point was that just because you are 'up' or 'down' on a investment in a company doesn't itself make that company a 'good' or 'bad' one. You can make lots of money on bad companies and lose lots on good ones if you get the timing right or wrong. On any sensible basis of evaluating what makes a company good BITF knocks spots off ARB - as does just about every other North American miner.

The 'fact' that you've made money on ARB (even if that is true) doesn't make it a better company than BITF where you claim, quite unbelievingly, that you are 90% down.

Over 90% down? That takes some doing since they're only 75% or so down from ATHs! All miners are good in some respect (apart from ARB now) and one of Bitfarm's strengths has been their excellent efficiency over the years - and as ever it's all about timing with each miner with BITF up over 50% in the last few days so surging with the best of them. I'm certainly not complaining about BITF as I'm 80% up - just timing again though (I'm over 70% down in ARB whereas others have made millions from it).

"Interesting points there Hexam regarding 100 times your stake back, that would be £1.80. We could do that on Quantum but a little while off for that part of the business."

The 2.6x alone should be enough to do that. If for example they sold it to 10% of the market and took 20% of the additional revenue they would generate annual revenue of over $300m at today's BTC value (and assuming future BTC price keeps pace with difficulty post halving). That should be enough for £1.80. Of course the deals could be much worse (or better) but it gives I think a good order of magnitude.

The low sp therefore indicates that the bookies (i.e. the market) feel the odds are very slim of them pulling it off. Some seem to be treating it at as a near racing certainty though in which case they must already be spending their millions in their heads and, fair enough, if they are right they will soon be spending it for real!

"Someone keep saying 50-50, why would you be here with a 50-50"

Because the return, if what they are claiming is true and the 2.6x translates to reality, will be over 100 to 1 - not just double. If I was offered 100 times my stake back on a red or black bet at the casino I'd never leave the roulette wheel. It's called playing the odds. You don't need to think a thing is going to happen to back it - just need to think that the odds are better than what you are being offered.

Clearly the market thinks the chances are slim that the 2.6x translates to reality or else the sp wouldn't be tiny fraction of what it would be if it did.

I think you’re just trying to wind me up now as I can’t believe you are as stupid as you are making yourself sound.

One is talking about traffic the other about sales so I don't think they are that different, especially if you strip out inflation, so both could easily be correct. Besides, am not too bothered if BOO traffic (or even sales) is down Black Friday as think their focus should be much more on profit than on heavily discounted revenue.

Note sure of the relevance of interest? Other than of course they need to have the cash to pay it (hence cashflow is also important but the RNS is not talking about cashflow at all). Timing of revenue recognition makes no difference to the ability to meet interest payments but maybe I've misunderstood your point?

As I said the £10m, as it is a pre-payment, definitely won't be allowed to count immediately. Whether they can argue the preparatory work is enough to count it by year-end is another matter (I'd be dubious personally). The fact they've given a wide £20m range suggests there are multiple question marks, over different contracts, and this may or may not be one of them.

It all just sounds like timing issues as they've said they expect the overall revenue to be unchanged. There is just uncertainty over what goes into 2023 and what goes in 2024 (and beyond). I'm not familiar with the rules for this type of business where delivery can be in years not months but I imagine there are many possible approaches and that it involves a lot of subjectivity so I'm not surprised that tens of millions worth of differences seem to be involved.

For example (making up silly numbers) if a £100m ship takes 4 years to build do you count £100m only in year 4 when the work is complete, or £25m each year or each year count whatever is in line with how much is completed that year (and then how do they measure that)? HW have all sorts on the go with different timescales and probably different methods/issues so can imagine there's a lot to 'battle' over with auditors, with HW probably wanting to count as much as possible as soon as possible.

One thing that is common though with any approach is that it won't depend on when payments are actually made. So pre-payments won't count as revenue until at least the work starts and, at the other end, so long as work has been completed any late payments won't affect revenue. Early and late payments only affect cashflow, not revenue.

In short it won't be great if they have to push some revenue recognition into next year but ultimately I don't think it really matters in the long run (though sp may obviously suffer a bit shorter term).

Reardon - it's not a £2m 'sell'. It's a £2m trade or, if you prefer, £2m being bought by participants in the auction and £2m being sold by participants in the auction.

Surely that's good news then for all those that are buying or who want to buy? I'm actually tempted at this price - so quite what is this 'manipulation' achieving? Besides it looks like buys and sells are pretty close - which in the end they always are.

If you believe in the company and are a LTH then you're not looking to sell anytime soon so what does it matter other than presenting (another) buying opportunity? Different story of course if you're trading it and are looking for a way out...

Any big shift upward will have to wait for good news from the company or at least signs of it. Conversely it doesn't look like it will break much below 30p unless some really bad news comes along instead. So just remains a waiting game for now.

I think it is undervalued. How dare me :-)

Once again, totally missing the point.

I think EZJ is currently around 106th? Another 5% or so would see them in the top 100 but of course other company mcaps are also moving so hard to say exactly what sp will be enough to put them in the top 100 when the next review takes place - though anything over £5 should be enough.

Not sure how beneficial it is anyway though being in the top 100 rather than the next 250?

"I just want this board to focus on views with facts/opinions to back them up."

PDS - That would be nice wouldn't it. But let's face it that's not how these boards are or what most people want. Most posters just seem to want to feel better about their investment and don't want any unwelcome facts or opinions to get in the way of that. So anything that is just out and out rampy without any substance (and even better has a bit of 'troll' bashing thrown in for good measure) gets lapped up by the board.

Just look at the recent mindless post that got 14 recs. Where is the substance in that post?

I get why people want to be cheered up about their investment, especially when it is not doing well, and don't want to hear any negatives. But it's a lousy recipe for investing.

I imagine you're the only one who is.