Member Info for Hexam

Flowerpot - I'm not sure but I think there are two things going on here. The first seems straightforward. As you say ARB have paid $6m to Celsius which means ARB now takes ownership of the machines and no longer have to make the remaining monthly lease payments.

The other bit is less clear "Argo agreed to terminate its mining services arrangement with Celsius in return for a payment from Celsius to Argo in the form of Bitcoin".

This suggests to me a separate arrangement whereby ARB were receiving from Celsius amounts for services provided. At around the time the lease started amounts of revenue began to appear in the accounts of almost $500k per month which are labelled simply as "Crypto currency management fees - United States ". It could well be that the BTC paid by Celsius is in respect of the termination of some or all of these fees. In other words just as ARB are paying Celsius upfront for the outstanding payments from an obligation, likewise Celsius are paying ARB upfront for similar outstanding payments - except in the form of BTC. Whether this would amount to 125 BTC though is unclear but this looks about right if ARB is no longer receiving around $400-500k per month. Of course I could be completely wrong but am just trying to complete the jigsaw when we haven't been given all the pieces. We'll know soo enough though if the 'Crypto currency management fees' stop now. If that doesn't shed any light then we'll know when the next accounts are published as this will explain the 125 BTC once and for all and whether it is connected to Celsius or not.

Not sure why some are expecting 'amazing' or even 'much better' numbers tomorrow. Difficulty was up over 10% in November and there was one less day in the month. Even if all the new rigs were installed during November then unlikely to see that much of an increase over October. More likely I think it will be a similar sort of amount to the 167 mined last month - hopefully a little higher.

Personally any confirmation that most of the new rigs are now up and running will be welcome enough news for me - any other good news would be a nice bonus.

I don't think losing £1.1bn is good news. Where did I say that? I see as you have lost one argument you have changed to another but are still spouting nonsense.

"Practically the only cash coming in is from shareholders paying for the rights issue". Again, false. Revenue last year was over £1.4bn i.e. more than the cash raised from the rights issue (£1.1bn). For this year, with more planes flying, the cash coming through the door will be much higher - unless there are full and lengthy lockdowns again which seems very unlikely.

Good to see though that you are now saying a 'massive' loss rather than '£500m'. I agree that it is likely to be a loss for Q1 but will be surprised if it will be 'massive' on any reasonable interpretation of the word.

For goodness sake Trumpet, now you have changed to profit. Yes that was a £1.1bn loss for the whole of last year. That is not the same as cash flow. Please make up your mind.

You said cash burn was £36m per week. That is false.

You say losses for the first quarter will be £500m because cash burn was £36m per week. That is false both because cash burn wasn't £36m per week and you cannot simply translate cash burn into profit/loss.

Anyway, just look at how silly your conclusion is. You are suggesting that easyjet is going to lose £500m in one quarter with planes flying when it lost £1.1bn last year in four quarters with far fewer planes flying and for a significant time none at all. As I said - nonsense.

No Blue you are wrong - the "fixed costs plus capex basis" IS the scenario of no planes flying. That's what it means.

You get a better idea of actual cash flow from the statement "Strong cash management also meant that operating cash generation was broadly flat in H2 with a £10 million cash outflow versus £1,438m in H1."

The total cash flows are clearly presented elsewhere in the accounts and bear no relation to £36m per week.

This is nonsense. The cash burn is not £36m per week. This is amount of cash outgo in the scenario that NO planes are flying. So projecting a quarterly loss figure from this number is simply ridiculous.

"ultimately the catalyst is going to be Bitcoin heading to $100K. Nothing else is going to impact the SP the same way"

I agree with a lot of what you say but I don't think BTC going to $100k is the only thing that could trigger a sharp rise in sp. BTC value is just one driver that impacts sp and even then not always as much as expected - largely because there are such other factors at play. I agree that a trigger of some sort is needed but feel this could be in a number of ways:

- Announcing another new purchase of miners (depending on how funded)
- Concrete news on impact of immersion including that on the older machines
- Developments on Pluto e.g. a successful IPO
- JVs/investment in the business or by the business

There are others no doubt. There are also possible adverse triggers too but this is why I think simply delivering on Texas will also move the sp up as at the moment I suspect that there is a lot of scepticism about achieving 3.7EH, the benefits of immersion or just getting the infrastructure built on time. In other words turning what may be delivered into what is delivered will I think be a big boost in itself.

Apologies Emma if that's what you took as my meaning. I am definitely not saying there are only nonsense rampers here. There are many that post here that are always or generally positive about the share but do not resort to hype, misleading statements or name calling.

However, there are many that just leap on anything that doesn't sound positive (which can hardly lead to a balanced discussion) and/or make statements which are very misleading but usually don't get called out simply because they are pro-Argo. One did get called out today and look what happened next - they were called a troll and that got double digit upticks.

Great to see this thread develop into an interesting, balanced and informative discussion from such an unpromising start.

For me this is what the board should be about rather than the name calling, nonsense ramping and the trying to out as a troll anybody who doesn't say 100% positive things about ARB in every post.

Hi AB - I agree that to compare profitability like-for-like, costs should be treated the same way - including the number of years used for depreciation of machines. I haven't done a full comparison of MARA v ARB though (too much work, wouldn't be perfect regardless and I'm not interested in investing in MARA anyway for much the same reasons as you). All I'm saying is that because there are so many differences you (not you personally, but general you) can't just take headline profit figures and make bold statements on the back of them without understanding the big ticket items they do and do not include.

As to 'mining margin' though it is clear ARB don't include the cost of machine purchases (via depreciation) in their reported margin so I just took out depreciation for MARA as their cost of revenue figures do include it. So comparing MARA 'mining margin' using the same basis that ARB do then MARA have a better margin. As you say though, ARB's 'mining margin' should improve with the new machines and immersion (and could easily end up better than MARAs).

I actually agree K3 in terms of MARA. I wouldn't touch them for many of the reasons argobull gave. On depreciation though I disagree that it is about forensic accounting - which makes it sound like fine detail. This relates to the cost of machines and is by far the biggest cost for ARB going forward (or for any miner) so I just think any measure of profitability that excludes it is just bonkers.

K3 - Interestingly MARA have stopped reporting EBITDA and instead have their own metric "Non-GAAP net-income" which (surprise, surprise) doesn't come out as a big loss but a huge profit! Understandably all companies like to present their numbers in the best light and neither ARB nor MARA are any different which is why it usually pays to dig a little deeper.

Must admit I don't like EBITDA as a measure for crypto mining as it excludes the cost of machines - the very thing that is key to miners and that causes so much aggravation and uncertainty in terms of funding.

K3,

As just replied to argobull I was answering in terms of mining margin. On slide 18 of what you linked it actually shows MARA on 85% and ARB on 81% for H1.

In terms of overall profitability I think it is too much a case of apples and oranges for the reasons I gave to say either way. All I know is that ARB is very profitable and that'll do me for now.

AB

It's always tricky to compare companies as they present things differently and there can be oddities and one-offs. It also depends on what is meant by 'efficiency'.

I assumed here that it referred to the high mining margin that ARB has.

In Q3 ARB mining revenues were $25.27m and 'direct costs' were $3.76m giving a margin of 85%.

It looks like the comparable figures for MARA were revenue of $51.71m and direct costs of $10.26m i.e. 80% margin BUT MARA include depreciation on machines in their direct costs and ARB do not. Once you strip this out to be on a comparable basis then MARA comes out on top.

If you are looking at all-in costs then the other comp you refer to includes $95m of stock compensation (exercising of options or similar). These should not be included in comparing numbers as clearly not recurring - at least to anywhere near that extent each year!

Also MARA in their total revenue do not include all the gains on BTC whereas as ARB do. MARA only include the gains on the BTC they have bought. On the mined coins they actually take the lowest value the coins mined reach after they are mined which can lead to impairments ($6.73m in Q3 on the link you gave).

So yes, MARA made a thumping loss for Q3 but I'd be wary of drawing any conclusions from this because of the above.

Don't get me wrong I think ARB is very efficient on whatever measure is chosen and it is clear that they are better than most - but MARA may at least give them a run for their money and in terms of mining efficiency they certainly look better from what I can see unless I'm missing something.

"but we mine more effectively, efficiently and more than Mara"

Do we? The numbers suggest otherwise.

“Basic arithmetic and common sense has shown for many months now that the only way is down for the shareprice, even without the ‘Omigod’ variant.”

Er…no it doesn’t. You say “the business seems to still be 'burning cash'.” - but they have already announced “c.£40 million of positive operating cash generation during the fourth quarter.”

You say “Lundgren admits that easy has only been flying about half its capacity for this quarter” - but we knew this - they announced they flew 58% capacity for Q4 - a big increase on previous quarters.

Losses were also reduced in Q4 according to Lundgren.

So EZJ on any measure was improving. Whether it can continue to do so depends a lot on how things turn out with this new variant. The initial hysteria seems to have died down somewhat but it’s still too early to say. It could have virtually no impact or it could be very damaging - as such any active investment choice at the moment on any airline seems more like a toss of a coin gamble. So as a holder I’m just sitting tight until we know more - or the market reaction changes the odds one way or the other.

@JACAL101 - I’m afraid I’m not the best person to ask about Pluto. Others hopefully will be better able to give you the latest on what they’re up to, though as far as the stock goes they will hopefully IPO at some point in the near(ish) future - no date has been set yet as far as I know. ATB

“if ARB does not sell the btc it mines then surely month on month the correlation will become closer”

The short answer is, in theory, yes. Clearly the higher the HODL in relation to its other activities then the more its fortunes are linked directly to BTC. Obviously too the value of its BTC mining is also directly linked to BTC value.

However, in reality I don’t expect it to get closer for many reasons including:

- they are diversifying away from just BTC mining (eg Pluto and other investments, plans to mine other coins - seemingly up to 20%, etc.)
- I think their ability (or not) to be able to mine an increasing, or at least not falling, share of the BTC available will be a bigger influence on sp going forward (also of course a higher BTC actually leads to increased difficulty to mine)
- how they fund this growth is also key to sp movement
- there are all kinds of other things too numerous to mention that can affect sp not least of which is good old sentiment and the level of reported/expected profits

In short ARB is a share and all sorts of things affect its price of which BTC value is just one thing, pretty important, but still just one thing and personally I feel it will shrink in importance not grow (unless of course BTC suddenly goes to $1m or zero)!

More conjecture upon conjecture - again without supporting evidence. As I said, anything concrete then happy to look at.

It would have been far quicker to post the links than write another essay. I've been following this board since March and can't recall any references apart from the Danish study you are fond of mentioning but if you have then apologies. I don't take my evidence from the evening news - I research and what I've found is plenty of studies that show masks are effective (and have posted links on this board before about these). But if I've missed something then happy to look at it. As it stands though I'd rather believe the scientific studies than your musings.