Member Info for Hexam

AB - Agree with everything you say. I have no idea what their rewards will be going forward for top staff but they have done it frequently enough in the past for it to raise a big red flag with me (along with the other ones) i.e. no matter how large their volumes are and how good their margins are (and they are currently better than ARBs) that's not much good if the profits keep getting wiped out by such large bonuses.

I do think that they have the better strategy though in terms of growing as fast as possible whilst ARB is focusing more on infrastructure - and they currently do have higher profit margins than ARB before the huge payouts, but these payouts and the other red flags put me off them.

AB - I'm not interested in Mara either but don't think it's as clear cut as you suggest:

They are a loss making company with poor output. - Only loss making due to the huge share payouts to top staff
They have the SEC investigating that site. - True and a worry
They use too much coal. - Doesn't seem to be harming sp too much at the moment
Their electricity costs are too high. - Really? Odd as they are more efficient than ARB (but with immersion won't be)
They don't do immersion. - See above

That said, they are good at their core business plan of:
Fundraising - Better than ARB at least! And they spend it on machines.
Putting in paper orders (that subsequently get delayed) - Sounds familiar!
Rewarding the top staff handsomely. - Biggest issue I have have with them

I'm happier where I am with ARB but prefer Mara's pile 'm high strategy - but the huge share payments turn me off.

Thanks AB - Agree that if you assume existing machines will be transferred then the first 100mW is probably fully funded - though obviously it doesn't give us the increase in hash rate that just filling with new machines would.

Given recent orders from other miners, and that they haven't yet fully paid for the existing order, I think even $160m is at the low end of cost required to fill the 200mW. So whilst they do have other options to fund this, as you rightly point out, it is hard seeing them do it without a raise for at least part of it.

@HarChris - Also if revenues are $22m per month then this equates to net profit of perhaps $11m pm i.e. $132m p.a.

Assuming a $100m raise by the end of the year then perhaps gives a P/E ratio of about 5. Indeed this looks excellent - but factor in execution risk and that to sustain earnings at this level requires much more funding than traditional companies need then I would say that it is still attractive but not overwhelmingly so - and this is assuming BTC hits $100k ish.

@HarChris - Yes if BTC does climb substantially then the 200BTC pm will look very healthy (actually my quick estimate of 200 probably undercooked it a bit and 250 BTC I think is closer).

I don't think this is a gimme though. If BTC goes up then mining becomes more attractive and then difficulty follows. But with the orders already being put in then we can be pretty confident difficulty is going to climb significantly regardless of what BTC does (unless it falls a lot). You're right though that some BTC rise should be factored in as likely and as I've stated I think the numbers still stack up though I don't go as far as saying it's a 'raging buy' - partly due to the execution risk you mention.

PI - I suppose that is where I have my doubts. The plan at the moment is to get to 3.7EH - from memory it is by much later this year not H1 (though could be wrong). We should also get more than this suggests from the benefits of immersion. In my view though we will do well to exceed 200 coins per month by the end of this year on just these development as difficulty is expected to at least double by then.

To grow significantly we need more than 3.7EH but we need the funding to do that, and for whatever is not yet funded of the 3.7EH, and where that is coming from is unclear. So long as we can get sufficient funding (by whatever means) then I think we'll be OK but there is plenty of execution risk along the way. Hence I think it is a much closer call in terms of value than some others do.

Personally I think this board is better than it has been for a long time. Gone are the days when it was full of crazy ramping or equally crazing trolling and it just seemed to be an endless playground fight between the two with streams of abuse. There are still elements of each extreme left but by and large most of the negative opinion is supported by fact and/or reasoning whilst the 'to da moon' brigade are thankfully largely absent.

I'm still fairly bullish about ARB but very few of those knocking the more negative posters are coming up with any sort of constructive case for real optimism and very little by way of numbers. There are exceptions (e.g. Argobull) but even then I can't see how you say the first 100mW is already funded or that it is 'simple maths' to be so bullish when we are currently losing the race for hash rate and the funding required to catch up is so scary (and possibly out of reach). As I said I'm fairly bullish but I think it's a much closer call and not blindingly obvious from the numbers. Happy to see some numbers though that suggest otherwise?

@Chuz - I don't think they can get a HODL backed loan for $100m let alone $300m.

From their description of the Galaxy Loan they could only borrow around 70% HODL and some of the existing HODL is already tied up in with those remaining Galaxy funds. It's a good option though for some of the funds required.

@Chuz - I'm not saying they have paid for those machines already (almost certainly they haven't) just that they should have enough BTC to comfortably meet the remaining costs especially as money is not due now but only when installed. Of course whether they choose to sell BTC is another question.

FP - Agree a raise is likely soon but don't think it is certain in the next few months.

We've been told Texas (infrastructure) is paid for from the IPO raise. We also know the deposit for the additional 2EH due to be installed in Texas has been paid for and that the rest will be paid in instalments as and when the machines are installed. We also know they have earmarked at least some of the part of the Galaxy loan that was not repaid, plus some of the recent bond raise, for new machines.

We don't have a lot of details on actual cost numbers but would suspect that the 2EH can be installed without the need for extra funding (other than perhaps selling BTC if and when needed).

Clearly though any orders beyond that in order to fill out all the 200mW will need significant new funding whether they go for sparkly new machines or getting the most out of older ones. If that is via a raise then so be it as the one thing that worries me more than a raise is not doing a raise (or other funding) and seeing the mining numbers drop as we fall behind in the race. The question of whether the raise/grow/raise/grow cycle is ultimately worth it for shareholders is harder to answer given everybody is needing to run so hard just to stand still and that the unpredictable BTC price is key - but I'm still confident the numbers work (just less so than I used to be).

JC - Just had quick look and agree that no bookings seem available for next week (after this Thursday) but there are some dates for the week after (including the 14th). So curious but don't think it is a big deal.

"It's an interesting failure of people to put up the face of never give in, even when there is simply no argument left. Even when everybody can take out a calculator and actually demonstrate to themselves what the reality of the world is, they still carry on in a weird parallel universe. Maybe twist the words, maybe nobody will notice? Confuse and obfuscate the context, maybe that will cover it up?"

You do realise that you are describing yourself here perfectly?

IAGL - Agree this is true to an extent and another reason why I think they will wait as long as possible before pressing the button - and so hopefully not at all.

Meanwhile, in other news the latest Covid numbers are out.

Cases for last 7 days show a rise of 43% against the previous week whilst deaths and hospital admissions have both risen 50% against the previous week. These percentages are high - but not as high as if using BB's method which would give rises of 143% and 150%!

So clearly this will put pressure on more restrictions but personally feel they are not going up quick enough to trigger another lockdown and that the government will want to wait until the last possible moment before taking that step. Reasoning for this is that hopefully the spike will be as short-lived as it was in SA and that BJ will want do anything to avoid locking down and losing any goodwill for resisting the pressure to lock down for Christmas and NY. Therefore I think he will only lock down if what is actually happening in hospitals means it is clear to most people that there is no other choice. I don't think it will come to that but, either way, the next couple of weeks will be crucial.

I see what you did there :-)

Firstly an apology to the rest of the board. I agree this has been an incredibly long and boring exchange.

However, I have kept going with it just to see to what lengths bb would go before he would admit that he is wrong on something which is so black and white. It appears it is any length despite numerous people also confirming that what VP said, in exactly the way that he said it, was indeed correct.

The argument now seems to be that a rise of 111% is somehow different to a profit of 111%. Go figure.

I also see that whilst I've been typing this that he is now goading me. Not interested.

I'm sure BB will want the last word (he always does). I will not resort to abuse though - I'll leave that to him.

Great - so that backs me up - not you.

The whole world could say you are wrong and your belief in yourself would still be unshakeable.

A rise from 142 to 300 is a rise of 158 AND a profit of 158 and both 111%.

Rise = Profit
No change = Break Even
Fall = Loss

Four people other than me (sorry, now 5) have now said you are wrong but still you won't admit it. To get from 142 to 284 is a mathematical rise of 100% not 200%.

Are you really suggesting that going from 142 to 142 is a mathematical rise of 100%?

No I am saying the calculator is right but that you are doing the wrong calculation.

Put it another way. Using your reasoning if the sp moves from 142p to 142p it is rise of 100% when of course it hasn't risen at all. If it moves from 142p to 71p your method says it has risen 50% when of course it has fallen 50% .

The correct calculation for the RISE from A to B is (B - A)/A NOT B/A.