Member Info for Hexam

"and everybody on here can formulate their own opinions on your duplicitious posting style"

I have and personally I see nothing duplicitous at all.

The "Difference" is that May looks like it could be a profitable and cash generating month. April and March were not.

The "Difference" is that Top Gun has created a buzz not seen since Spiderman and for a non-superhero movie since heaven knows when.

The "Difference" is a very good month looks like it is going to be followed by another very good month given the line up in June.

The "Difference" is that I think we have finally reached a genuine turning point rather than the false dawn of December and the OK (but still well short of where we need to be) March and April.

Anybody that doesn't consistently say "everything is awesome" gets slated by a small hard-core group of rampers on this board. It's a shame as the people most worth listening to are generally the ones that WILL change their tone as the situation changes - not those who just big it up all the time regardless - or equally those that talk it down whatever the news.

Rant Over - Football Starting.

Just checked. It was indeed 2.2EH by end June. Then 3.3EH by end Sep then 5.5EH by end year. All without immersion built in.

So yes, hopefully under promising a bit - especially the earlier numbers :)

Personally I think it is hard to call which is having more impact on the sp at the moment - the sluggish BO numbers or the court case but if I had a choice between the two I would rather see BO numbers much closer to pre-pandemic levels than winning the court case. This is simply because the court case is a one-off hit (which I think we'd survive especially if BO picks up further) but the gain from a much improved BO will probably be worth as much in just one year and maybe sooner.

There's no doubt though that if the court case is successful in reversing the decision or reducing the amount considerably then this will have more of an immediate impact on sp which will benefit more those looking for an earlier exit.

My outlook is longer though and I just see the court case as a major obstacle in the road which could go either way. What I'm far more confident of is a sustained growth in BO numbers that has already started but I think will really take off over the summer with Top Gun possibly leading the way. Winning the court case would then be a lovely bonus on top.

"how are they allowed to get away with presenting false figures in an RNS pls"

Good question. I thought originally it was just because of currency fluctuations as these can always cause inconsistencies between monthly numbers and YTD numbers - and that would be fine in my view. The differences are way too big for that though or any other typical cause of minor inconsistency.

They could argue that the monthly numbers are just out of date and are consistent in some way with the last published basis. For example the depreciation numbers are much higher in the actual Q1 accounts compared to the monthly numbers which suggests perhaps the monthly numbers simply hadn't been updated yet for the machines that came on board late last year.

So yes they could be published as an 'unaudited guide' to performance rather than a statement of fact. I'm just guessing though but whatever the reason I just know to take them with a big pinch of salt now. I don't know if it is something they can 'get away with' - I just know I wouldn't have agreed to sign them off (when I used to do similar work).

It will be interesting to see if there is any uplift in the number of coins mined and it may give an indication of how much progress they have made - but I don't think it will be significant as I think their plans were to only reach 2.2 EH by the end of June? Also although difficulty levels have just fallen, the average over the whole of May will be at least 5% higher than April - although we do get an extra day!

So all in all I'm not expecting much difference either way from last month but as FP says what will be really interesting is any update on Texas progress. What I won't be paying much attention to though is all the other numbers they give as Q1 figures proved the ones in the monthly updates (including the mining margin) were nonsense :(

Just to be clear - about the point I'm trying to make anyway.

Personally I do not have a clear idea of if or when or on what terms any dilution will take place. The messages given out have not been clear or consistent enough for that - for me anyway.

The only point I'm trying to make is that if or when it happens the company is immediately put in a better position by raising cash. The starting point by how much it is in a better position (and so how much mcap goes up) is the amount of cash raised BUT how that actually affects mcap will also depend of course on sentiment at the time and how effective they are in using that money. As to impact on existing shareholders this will additionally depend on how the money is raised. If it's an RI then we are made no worse off initially (before sentiment etc. takes over) even if we can't afford to take up the rights as we should be able to simply sell the rights instead. Selling the rights though means you forego most of any future upside (or downside).

In short it is the smaller slice of a bigger cake argument. The size of the cake by definition is mcap and the number of slices is the number of shares. Any cash raised will increase size of the cake and of course if the dilution is over a year away the size of the cake will hopefully increase a fair bit in the meantime.

Most of all though it is to get across the point that the 19:1 (supposing and whenever it happens) equals 95% loss argument is untrue and pure scare-mongering as it simply doesn't work in the way some are suggesting. The only way that would be true is if they issued 19x more shares to new shareholders for no cash at all (or without any reduction in debt).

"Wrong!! The mcap will only increase if SP goes up."
"The mcap is not an indicator of a company's financial health, cash in bank, assets, or prospects etc"

Those are rather odd statements. The first part is clearly wrong as obviously mcap is SP x Number of Shares so it only requires one of these to go up. But also you're therefore suggesting the sp (and hence mcap) is not an indicator of financial health, cash in bank, assets or prospects etc. I agree that ultimately the sp (and therefore mcap) is driven by sentiment but the starting point for that sentiment is all these things and more (in the example you gave it is the 'prospects' in your list that is driving sentiment and hence sp).

The point being made is for any RI, placement etc. that starting point changes because of the cash being raised. The mcap goes up by the amount of cash raised and only then does sentiment takes over.

As for shareholders I agree it DOES matter how that money is raised but if it is by an RI the key thing is that the starting point is that we are no worse off (before sentiment kicks in). On the other hand if it's a placement AND at a big discount then we will start off from a much worse position.

Some people (like Ella just has) here peddle the message of a (possible) 19 to 1 dilution meaning the value our investment will automatically fall by 95%. It is simply not true for the reasons above. If you believed the cash raised has no impact on mcap then it would be true!!!

Yes clearly the starting point is whatever the mcap/sp is at the time - which nobody knows.

“The market cap before and after the RI should be the same theoretically as what value are you adding by selling shares?”

Wrong. The market cap in theory should increase by the amount raised by the company. The additional value is in the form of the additional cash raised - though the real value gained depends on how well they use it.

It is the share price that in theory is unchanged IF there is no discount as the increase in mcap is offset by the increased number of shares.

Of course typically a discount is offered so the share price ought to fall - but people who take up or sell the rights should be no better or worse off as that fall should in theory be offset by the value of the rights.

That’s all theory though - in practice the reality will be driven by sentiment as to whether the RI is good or not (i.e. will it generate more or less value than the cash amount raised). Usually the sentiment around RIs is not good but who knows in AMGO’s case?

It was a great call but probably not due much to any of the reasons they gave. It was a hatchet job on ARB and although some of the concerns were valid it is really telling that all the other companies listed in their table (dated 24/11/21) have seen their share price drop by more than ARB. ARB appears to have fallen 63% but all the rest by over 70% and up to 80% - if the graphs I'm looking at are correct.

In other words they attacked the company but it is the industry as a whole that has really suffered.

"To be honest I'm not sure how much clearer we'll be after the Q2 results."

Hopefully at least a bit. The value of any machines received will appear as additions in tangible assets under 'mining and computing equipment'. Prepayments will fall but any new prepayments will be added and I presume this will be broken down by Bitmain and Intel (if appropriate). There may be other costs in there too (immersion etc.) so how much we find out will depend on how much they comment on both the tangible assets and the prepayments but it should be possible to work out a fair bit or at least make some reasonable estimates.

AB - What you say makes sense but I think the cost of the bitmain machines could be a bit higher.

The video, as you say, is clear that over 2/3 rds of the Bitmain order has been paid but does that necessarily mean that was the case the 31st March (the date of the accounts)?

If $58m was just the deposit on the machines and it was a 35% deposit (as was suggested at the time on this board) this would imply closer to $165m for bitmain. Of course the $58m may have been more than just deposit and/or the 35% may be incorrect.

In short I think there are too many assumptions be confident in any number but hopefully we'll get a better idea at half-year if not before.

Mine too, especially from 4 onwards :-)

Sure AllKap,

YTD is $2.4bn.

I think the last week of May will be excellent with Top Gun and June should be at least $800-900m with Jurassic and Lightyear both coming out earlyish in the month and Top Gun still running.

So perhaps $3.6bn+ by end of June.

Q1 was basically a write-off aside from Batman because of Omicron/lack of films so would think H2 would be better than H1 by at least 10% so $4bn maybe? Put another way surely we should expect at least $650-700m a month after June? I know some months are looking sketchy at the moment but there are some monsters in there like Avatar and Black Panther.

I would certainly be disappointed if numbers go backwards in H2. Just can't see it.

"I think that Debenhams is a completely incomparable company."

I agree. I wasn't comparing it. I should not have said 'Debenhams' but 'Company X' or something - i.e. any company that was open for business but is now not.

Thanks for the comments though and to improve my 'positivity rating' would just like to add that in my view US Box Office this year will exceed $7.5bn and will be enough to make CINE both cash positive for 2022 as a whole AND be profitable (i.e. positive net income). Then I'll definitely be satisfied :-)

"I'm saying by Q4 if they have started phase 2 build out (the remaining 600MW) that there might be additional costs again but maybe these get accounted for in a different section"

I'd be surprised if most (if not all) of any costs associated with phase 2 do not go through capex. This may well include time spent on phase 2 by anybody already employed. As such these costs will not hit the bottom line until production starts from phase 2 and it all comes through depreciation starting from then.

Largely agree AB but I don't think you can say that "there'll likely be more costs than this assuming they start pushing ahead with Phase 2. These won't be related to phase 1 mining".

The Q1 costs will not include a lot of the additional ongoing costs associated with Helios as it was not operational then so I would expect ongoing staff (and other) costs to be higher as we move through the year. I also expect there to be significant upward pressure on share based payments (more staff plus need to stay competitive).

For goodness sake mountainous read my posts properly. The ONLY reason I mentioned Debenhams at all was that someone basically said that CINE is open for business so everything is alright. It is not - a business not only has to be open it has to be doing enough business to pay its debts and make profits which at the moment it is not. I have also said repeatedly though that I believe it is only a matter of (a short amount) of time that it becomes profitable - which is very positive.

CINE is a very different business to Debenhams and a much better one as I made clear so please don't twist what I say - you're normally a much better poster than that.

Hi Beta - I used the H2 numbers as these are detailed - I'm not aware of any detail on a monthly basis in either Q4 or Q1 so not sure they can be used?

As to the improvements since H2 how do you know if any structural cost savings achieved, and not already in H2 2021, are greater than the inflationary cost pressures that we know are now hitting? Is there any evidence that the other revenue items this year are higher than late last year? And what about interest - that is surely higher than last year?

Also I don't see how you can say Q2 will easily outperform Q4 2021. Having said that I agree that Q2 could end of cash positive if June is good enough ($800m+ at US Box Office) but my point was we are not cash positive as of now.

I think though in essence we agree on the key thing though and we shouldn't get caught up too much in the detail - that is:

Providing Box Office improves as much as I think, and you suggest, then the business will soon be cash flow positive and making profits. Just have to see just well Top Gun, June and the following months all do. Early signs are promising though - especially with Top Gun.

FP - Certainly wouldn't 'poo poo' you as you are perfectly correct. ARB is currently operating around 80% of what its EH suggests even before allowing for the extra coming from zcash so really it is less than 80%.

In my numbers I assumed the 80% improves to 95% (comparable to other miners but in reality still worse really as again this includes additional BTC from zcash conversion). The reason for the improvement assumed is two-fold. First Q1 suffered from bad weather and possible testing/moving of machines. Both are (hopefully) short term factors. Second, the new machines should perform close to or at 100%.

AB has effectively assumed 100% efficiency as his approach works from the theoretical EH share - but again with no extra allowance either from zcash.

All the above is before any immersion benefits too.