Member Info for Hexam

Hi T_R - It's unclear what is happening to the intel machines. As you suggest, the article is not conclusive either way as it is simply referencing the order that was made and an assumption it is still 'live' since they have not announced otherwise.

All we know is that the plan was to have 1.8EH from these machines but this was scaled back to 0.9EH to 'preserve capital' and the delivery which was expected in Q4 last year was pushed back to this quarter. This was all communicated at around the time of the interim results. Those results also told us that they had already paid £15m to Intel and £4m to epic.

Since then though we have heard nothing as far as I'm aware. So it could be anything from a cancelled order with the loss of the £19m already paid to progressing with the 0.9EH as intended - with plenty of options in between (e.g. if they have cancelled the order then hopefully they got at least some of £19m back).

Given that they were running out of cash even quicker than many of us thought suggests perhaps that they are proceeding with it and this was placing extra strain on their reserves? On the other hand it is very odd they would do this at the same time as selling so many new bitmain machines at such a heavy discount - but perhaps they were legally bound to the deal and/or didn't want to give up the £19m?

Also, as you say, if they had cancelled the order completely it is surprising there hasn't been an RNS, but then again transparency and ARB haven't been seen much together in the last year or so.

So I'm afraid it's a case of wait and see. In a way it would be good news if the intel machines were the cause of the accelerated cash crisis as at least there will be some growth to show at the end of it (even though, on the face of it, it would have seemed cheaper and quicker, had they a free choice, to have just stuck with the new s19 Pros).

One way of another it will hopefully be cleared up soon...

Myoh - Agreed

It will also be interesting to see what HUT8 do today.

Myoh - Yes, CINE probably gain from premium formats but they lose obviously from having lots of screens not showing Avatar 2 (or other Blockbusters). The 16-18% disclosed by CINE is based on box office revenue so a straight comparison with BO mojo so I think is a better starting point.

Myoh - CINE have a market share of 16-18% in the US not 30%. CINE disclosed this recently in a presentation to market the business. I don't know if 30% is correct for the number of screens but that's not an appropriate indicator for revenue anyway, particularly if just looking at Avatar2 alone, for lots of reasons. Even the 16-18% may overstate their share of revenue from Avatar 2.

@Jazihanderz - The monthly performance docs are labelled under 'Operating Report' for US, UK and Picturehouse separately (not ROW as that sits outside Chapter 11 but contribution relatively small). The November ones are dockets 1179, 1180 and 1181.

The loss disclosed in October was $200m and in November was $100m. As well as Avatar 2 has done it is unlikely to have turned CINE into profits in December as the support from other films was very poor so domestic Box Office overall was not up that much in December compared to November (8%).

https://cases.ra.kroll.com/cineworld/Home-DocketInfo

Look at the court dockets. They are releasing monthly earnings. November showed a $100m loss, December earnings should be out within the next two weeks - hopefully a smaller loss.

Huss - I think a middle ground is actually very possible as any 'dilution' (in whatever form it might take) brings all values into play as obviously that dilution could be anything from 0% to 100%. If there is no dilution at all though then 40p will probably seem very cheap! However, the company have signaled 'very significant' dilution so anywhere between 0 and 40p probably covers it...

Sorry Ted but among other things Cinemark has over 500 sites (the 320 you used is just the number in the US I think).

Also CINE's debt is now over $6bn with the DIP financing. Plus there's the court case.

Makes quite a difference to your calculations I'm afraid but bottom line is I think it is very hard to justify a value for CINE at the moment that points to someone paying 1-2 dollars a share - not that I think a full share sale is a very likely option anyway, just another one of Ian's (very poor) shots in the dark (and something CINE have themselves ruled out).

Stnz - Even with the next difficulty hike of around 10% the average difficulty for January will still be lower than it was in November when they did 198 so they should have every chance of doing over 200 so long as there’s not much disruption from the handover or other reasons for curtailment in the month.

No problem TR. My guess is that he based that on what ARB SHOULD be mining with 2.5 EH which is indeed around 275 BTC and he just worked backwards from that. Even without bad storms though ARB have only been running at about 70-80% efficiency for some time and there’s no reason to suppose they’ve suddenly fixed all their issues with that - unless Galaxy have the answers, which would be nice :-)

“Now mining for 16 vs 30 days means we should get 275 btc next month if the machines are on every day.”

They didn’t mine for only 16 days though (I think that was just a YouTuber messing up). As Chaebol says ARB mine around 200 a month normally at the moment and no reason to suppose January will be higher other than due to average difficulty which will still be a bit lower than it was in November (198 mined) despite the expected increase in a few days.

So maybe 210 at a pinch but not much more so best not to expect 275 and then be disappointed.

Revenue will be up which will be good but even better to see will be if there is a further improvement in the mining costs per BTC mined due to the hosting arrangement. We shall see…

Yep, just did. Next stop 18p to sell more or 9p to buy back. Don't mind which :-)

The sp wasn't 2.5p when they were building Helios though to be fair they did do a share issue to fund it. That's where most of the money raised from the Nasdaq IPO went. They should have done another share issue though to at least partly finance the machines - but shareholders were against it and unfortunately PW listened to them.

They got half what it cost to build. Great deal! The machines they sold were at an even greater discount.

I agree though - I'm surprised they got as much as $65m for Helios in today's market but then again it puts Galaxy in a great position to possibly take the rest of the business with the loan they've given too.

"why would companies buy ARB's assets when they could pick them up on the cheap"

er...they did anyway

"there are only a few miners that are transparent when it comes to the financials and ARB is one of them"

That's one of funniest lines I've heard in a while. ARB - the only miner not to say how much they pay for machines. The only miner not to issue Q3 accounts. No details on hosting arrangements or interest rate being paid to Galaxy. Trumpeting $10k per BTC mined and conveniently ignoring all the other costs. No updates lately on intel or Pluto. Etc. etc.

I would be happy to use more up to date information but sadly that's lacking.

And I actually said I believe the costs WILL come down. Unfortunately they are starting from a very high place.

Yes, but all they’d be buying in effect are the machines and a couple of small Canadian data centres. Probably better and cheaper to just buy new machines and if they want them to be hosted in Texas with Galaxy they can. Of course Galaxy are in the best position but they could just wait for default if ARB can’t recover.

ARB was worth buying because of Helios but that’s already been sold now. It was their USP.

“With significantly lower Opex going forward”

How much is significantly lower? They should be able to benefit from any PPA Galaxy manage to get and they MAY benefit from the Texas overheads being passed to Galaxy but surely Galaxy will charge for these? And what about the margins on top for Galaxy to make it worth their while? It should be better once Galaxy get more tenants to share those costs but I don’t see opex coming down that much before then - unless you’re privy to the numbers?

Quant - I agree December's numbers were all screwed up by the storm which is exactly why I didn't use them. I used the November numbers instead to show where the $40k plus came from so not sure what point you are making. It would have been $50k had I used December. By all means critique my analysis for November but all bar one of the numbers is exactly what ARB gave us in the November update.