Member Info for Hexam

Yes - as @selecta6 said previously the smart move would have been to sell on the slight peak immediately following the announcement, but that's hindsight.

It could get worse tomorrow too as most, if not everybody, should now be able to trade their new shares. This means there could be selling pressure as some (or many?) people still think it is an opportunity to make a quick profit on the new shares they only paid 180p or so for. That's not the case of course and really they'd just be crystallizing a loss but it's not uncommon for the sp to drift towards the offer price i.e. the 180p in this case. If it does drop significantly tomorrow then I'll be tempted to buy some more as such a drop would in my view be based on investor misunderstanding rather than worsening fundamentals. Hopefully though the sp will hold up well in comparison to other travel stocks in which case I'll just hold as I feel the stronger balance sheet the RI has given TUI will mean it is better placed to take advantage of the recovery than it would have been without it. Just my view though and it's certainly not a share without risk.

Agree Sundezena but cargo revenues have been less affected by the pandemic (in fact revenues have increased). So whilst very welcome now, in terms of growth I think it is passenger revenues that will be key as this part recovers.

I seem to remember reading though that some planes that would have been carrying both cargo and passengers have been flying cargo only. Obviously these flights will become much more profitable now with passengers also on board.

As I said there are just too many factors to make confident guesses on future revenue but hopefully the Q3 info will be helpful especially if they give any insight on advance bookings, particularly since the US announced reopening.

IAGL - That 45% target was just for Q3 and I'm not sure they will have hit that as I think they were expecting earlier lifting of restrictions? Looking much better for Q4 though. You're right of course that capacity is only part of the revenue equation with load factors, pricing, mix of tickets (especially numbers going business) etc. part of the mix. That's why it's so hard to predict and will be useful to get insights from the Q3 data and commentary. Take all I've said with a pinch of salt however as it is only 17.5% fact versus 82.5% opinion (or thereabouts).

@IAGLongterm - I think making predictions for Friday is very difficult let alone knowing what impact this will have on sp. Too many moving parts.

However, as passenger revenues in Q2 were only about 700m euros against a pre-tax loss before exceptional items of 1.2bn then even if IAG reached their target of 45% capacity for Q3 (about double that in Q2) then hard to see the loss being significantly lower - especially as quite a lot of the costs are also related to the number of passengers and/or flights. So personally I'm not expecting fireworks from the figures on Friday and will be 'content' with any loss under 1bn and 'delighted' if it closer to 500m. Instead I will be more interested in any commentary regarding recent bookings etc. now that the transatlantic routes are opening up in addition to the previous relaxations of the rules. In my view we'll only get a good idea of the speed and extent of the recovery once these, and the revenue they generates, start to really show up in the numbers.

Great news that the 1.7EH will be reached by the end of November though it looks like the increase in October will be enough just to offset the impact of increased difficulty so perhaps around 165 mined again? Margin, revenue and profit figures will all be huge though thanks to BTC's surge in October.

As to the website only showing 1075PH I suspect they will not change this until the installation is complete as any number they post there will quickly be out of date whilst the installation is ongoing. Agree though that they might, as a one-off, increase to 1240 PH once the operational update is released and if that officially quotes this figure.

@skeletor

When ARB reports mining revenue it is based on BTC value at the time of mining.

Any subsequent movement in BTC is included in total revenue for both coins traded and those held. These can be clearly seen on the results in the lines for:

Change in fair value of digital currencies = £8.7m for Q3 (this is the change in value for the HODL)
Realized gain on sale of digital currencies = £0.4m for Q3 (this relates to change in value on those actually sold)

There is no risk of double counting.

It does make the results very volatile though and for October impact of the change in BTC will be around £20m!

Hi Wolf. When I see 'gross profit' I usually think of Profit Before Tax but in this case it isn't. It seems to be all profits from crypto related activity (before other costs and technical items like foreign exchange movement). Just seems a bit odd as a measure when they use so many different ones already and some may think incorrectly it is PBT - after all some still think mining margin is PBT!

The important think though is whatever measure is used the numbers are impressive!

Profit Before Tax is always the first number I look for but like you I think I'm just a traditionalist or as it was said of Bruce Willis in one of the Die Hard films "a Timex Watch in a Digital Age" :)

Yes, no major surprises. All the numbers down to what is confusingly labelled 'gross profit' are now reported monthly so were all known already.

Good to see the excellent overall profit before tax numbers in the flesh though and highlights the profitability of the business in terms that potential investors that are less familiar with crypto-mining can perhaps relate to more.

One interesting item is the loss on sale of investment line that has appeared in Q3. It's only £750k but am intrigued as to what it relates to?

Yep - the second part of the payment ($12.5m) hasn't been paid yet but the full value of the land is still shown in the assets with the $12.5m held as an offsetting liability under the snappily titled "Deferred contingent consideration".

Lotto - Isn't the £3,429,826 just the $5m mentioned in the RNS that was deposited with ePIC? Maybe the size is just coincidence but either way I think the machines we are expecting this quarter are just those from Core Scientific unless the £3.4m relates to the missing 80PH that no-one seems to know about?

As to the £28m not all of this relates to Texas. Just under £10m is from the acquisition of GPUOne (that's the figure you can see in the "Acquisition through business combination" line) in the table of tangible assets. I presume the rest is Texas and will mainly just be the value of the (shovel ready) land which they paid for with shares I seem to remember. I don't recall seeing anything big go through the P/L so assume the value held is just the amount paid less the tiny bit of depreciation so far.

This is the latest as far as I know regarding ePIC. RNS 9th August:

"The Company announces an update to its 22 February 2021 announcement relating to the expansion of the Company's mining capacity in Q4 2021 and 2022. As previously announced, Argo committed to an initial purchase of US$8 million of mining rigs from ePIC Blockchain Technologies ("ePIC"), with delivery expected to begin in Q4 2021. However, based on limitations of technology, Argo and ePIC have agreed to amend the agreement. Under the amended agreement, the initial purchase order was cancelled and, at Argo's option, $5 million deposited with ePIC, in whole or in part, can be applied to the purchase of ePIC mining machines or ePIC common stock or repaid in full."

Excellent blog. Thanks for posting it. Refreshingly balanced, insightful and informative. As you suggest they are clearly in a strong cash position with the actions they have already taken but the result is a huge level of debt and reducing this depends on how quickly they can return to profits. Like you say there are things to look out for in the Q3 results although Q4 may be more telling.

"Are we only partially repaying the galaxy loan?"

Yes - the rest is expected to be restructured and used to pay for machines:

"The Company expects to repay £18 million ($25 million) of the principal of this loan with the proceeds of this offering and convert up to £14.5 million ($20 million) of the principal of this loan into mining machine financing upon receipt of machines and satisfaction of other conditions, with the repayment date for such financing extended beyond 29 October 2021 to a date to be agreed."

Hi groots,

Nice post and would agree with the two reasons you give as the most likely ones for there to be a RI. A third I think though is if profits don't return quick enough to ease the debt burden but I think they will - still a risk though.

Also in fairness would point out that all RIs are dilutions - as dilution just means that there are more shares over which profits are spread (though of course the extra funding if used wisely enough could eventually offset this and actually increase earnings per share). Agree though that if you take up the rights, or sell them, then you are no worse off financially other than from how the market reacts to the RI which may be positive but is typically negative. The only way you lose out from the RI, other than through market sentiment and its impact on sp, is if you let the rights lapse i.e. do nothing, but even then the broker should still try to sell them for you.

True - but they've already published all the revenue in detail for the last 3 months (including the appreciation on BTC) as well as most of the expenses including depreciation on machines. I know other costs, like wages, are going up as they are employing more people but I can't see this making too much difference.

So you're right, people have expectations but given ARB have already published most of the key figures already it's hard to see those expectations being under-(or over-)shot very much - unless there really is an unexpected, significant one-off item (good or bad).

Rory - limiting what damage? Unless there is something unexpected (like a big write-off) the profits will be decent and should show strong growth compared with Q1 and Q2.

Good news sends the sp up - if it sends it down then it just means it is not as good as some people think it is - or maybe expected.

Agree Wobbles - RIs, though not particularly welcome, are not the demons they are often made out to be. If there is one then it's not the end of the world and I would rather have IAG well funded and better able to take advantage of the recovery than the alternative of trying to just make do on what they have. I think they will be able to take advantage of the recovery though without a RI but that depends on just how quickly the finances pick up and we are probably at least a few months from knowing much more about that.

*to

Happy too but can't remember anyone saying outright that their definitely won't be one in the future. Plenty have quoted the CEO as saying he is not considering one at the moment which is perfectly true.