Member Info for Hexam

"Shareholders who cannot take up rights will be slaughtered" - Nope, they can simply sell the rights and get the same value out of them that way.

"The RI will involve issuing 9-10 billion new shares at approx .17p. You can trade your RI shares at a lower price.
This will collapse the share price. Anyone who thinks that the current share price is justified is deluded."

Yes, the share price will fall but that's only part of the story. The value of the shareholding is unchanged. That's how RIs work. I can bore you with the calculations that prove it but they really are boring and others have already done it.

Yes, there may well be 95% dilution but that doesn't mean a 95% reduction in value. A RI on its own does not change the value of a shareholding (regardless of the price it is offered at) - it is the sentiment about it, good or bad, that does. 'Anyone saying otherwise' doesn't understand how a RI works.

"The rights issue price will be crucial but too high a price and people won't be able to afford them and too low and the money raised won't be enough for the company plans. Either way existing shareholders are screwed."

The price won't be too low (what's the point of doing a RI not to raise enough money)? If shareholders can't afford to, or don't want to, take up all their rights then they can sell some or all of them and whoever buys those rights will then take them up. So as long as there is a sufficient market for them (or if it's fully underwritten) the company should get the money they want/need one way or another.

"there is a guy on stocktwits posting several fund purchases"

He may simply be taking the info from the relevant fund sites as the holdings on these for both tally exactly with the numbers you gave. Perhaps the share purchases are taken from any change in this number as I can't see these separately and the numbers only appear to be updated daily?

https://www.globalxetfs.com/funds/bkch/

https://amplifyetfs.com/blok-holdings

"A nuts month for CORZ doesn't look much better than a poor one for ARB with perspective."

I think you're mixing up two things - productivity and value. Looks like Core mined 1077 BTC with 7.5 EH, that's 144 per EH. ARB mined 172 with 1.6 EH so a much lower 108 per EH. So this does suggest a much better month for Core than for ARB but hopefully the poor Jan figures were just a one-off for ARB - but with the lack of decent commentary it's hard to tell. Anyway, that's only one part of efficiency and it may be that it is costing more for Core per EH (I haven't looked).

In any event comparing mcaps just on the relative number of coins mined in a month is not nearly enough to determine relative value - if only it was that straightforward!

@chatroom - I questioned yesterday why you felt the low level of sp meant that cineplex could claim less as this didn't make much sense to me as the level of sp makes no difference to the assets available to them. What you've just said though is spot on i.e. if someone is suing you for money you don't have then raising cash is probably the last thing you want to do.

"the lease payments would clear down the balance sheet liability."

Hi Wolf - I see what you are getting at now. My shorthand version probably confused things but yes, the actual lease payments reduce the lease liability but the question was about depreciation and this is impacted as a corresponding right-of-use assets was set up at the same time as the lease liability and this depreciated by around £1m in the first half of 2021. Even though a new asset may have been set up the depreciation on it is likely to be much lower so I do think this is the most likely reason for the drop in depreciation. I was just trying to keep it simple - and a little less boring :)

Yep, sorry, it's in $'s not £'s. I suspect it is pretty much all just the seed capital at the moment but will be interesting to see how it fares - assuming these numbers are the right ones.

Hi Wolf,

Not sure what you are trying to say. I'm pretty sure the drop in depreciation is due to the lease payments as these were being charged to profits via the depreciation line and have now ceased.

@gspanner - how about this? Suggests it's £43m (note that presumably includes seed capital)

https://www.morningstar.com/etfs/xnas/btf/quote

"At these current levels Cineplex cant have much from us no matter how hard they try. As soon as the share price rises they they will be entitled to more."

Sorry - I don't understand this point. Why does the sp impact what Cineplex can get from us? I agree though - I can't see any listing happening with the court case unresolved.

"What is the point of US listing as the alternative finance options if raising money through US listing is going to dilute the UK share price?"

The same as raising it in the UK except with the US they may feel they can raise at a better price and raise more (which seems reasonable as that's where most of the cinemas are and presumably there are US investors that would welcome an opportunity to invest in the company given an easier opportunity). The benefits in their eyes would have to offset the additional costs and aggravation of a dual listing - which are not insignificant.

If the company wants to raise money their main concern is how much they raise not on the impact on existing shareholders (except in so much as they own share themselves of course)!

@JAMESY1980

I don't think it is that simple. The more they hold the more they have to fund their growth by the other levers - either costly loans (more risk and at least have to factor the additional costs against growth in value of BTC HODL) or equity raises which may be good from the company's viewpoint but not so much for existing shareholders. I'd really prefer them to adopt a balanced approach using all three levers but that's just me.

"There will be no dilution to UK shares with US listing. The amount that they raise via US listing helps them pay off some debt."

If they raise money via the US listing then by definition that is dilution as there are more shares overall over which profits are spread. Whether existing holders gain or lose though depends on the terms and how the sp reacts which in the short term is anybody's guess but in the long term should be driven by whether the earnings go up enough to offset the increased numbers of shares i.e. whether the earnings per share is at least maintained or not.

The US shares and UK shares will go up in line so there is no danger of UK shareholders winning whilst UK shareholders lose.

It is a little odd but there a few possible explanations:

1) The usual reason why depreciation drops is that an asset that was being depreciated is no longer being run-off. This could be because it has been written off or has reached the end of its run-off period (so in ARB's case it could relate to machines bought over three years ago - if any are that old which I don't think they are)

2) It could well be the Celsius deal though as the lease payments would have gone through this line but have now stopped.

3) It may be some hiccup with timings as depreciation has been increasing over the last few months as new machines have been brought on line and it may just be that December included a bit of catch up

I think the Celsius lease is the most likely reason but obviously can't be sure and there may be other reasons I haven't thought of.

"And your pretty sure these are likely sales and not whats heading of to argos labs?"

That's a very good point but in that case it is still presumably a sell or else it wouldn't show up in that line. If they just hypothecated them to Argo Labs then it would still be in HODL I would have thought as Argo Labs is part of ARB I think?

@ValueandGrowth - It doesn't necessarily work like that as there are other reasons why the numbers don't add up such as the change in relative price of the other coins they hold relative to BTC. Also in December the difference was +64 even though sold at least 30.

Hi FP,

It's hard to say. From the monthly updates they made a loss on sales of $447k in January and $1m in December but obviously the loss by bitcoin (or BTC equivalent) depends on the price when those coins were originally mined or bought. So wouldn't like to guess but given where BTC peaked it's at least a dozen or so in January and 30 in December and probably quite a few more.

Selling to keep the lights on is a good thing in my view but the slightly concerning thing is that are selling at a loss which suggests perhaps they are doing it more out of necessity than choice?

" it makes no difference to the Sp as the company aren't selling any btc anyway"

Actually it looks like they've sold a few in the last couple of months - perhaps even enough to pay for ongoing costs which in my view wouldn't be a bad thing.