Member Info for Hexam

No PantherPat, you're reasoning only works if more money wasn't raised.

In the placing in 2020 an additional £419m was raised and the RI raised £1.2bn so £1.6bn in total. So you cannot compare an mcap today that includes £1.6bn extra funding with one in 2020 that didn't.

The correct approach if you take account of the amounts raised and discounts offered gives I think around £11.25 as the answer of what is equivalent to £9 today, not £18. If £18 was the correct answer I doubt anybody would be invested. I certainly wouldn't.

"Firstly, you should all realise that it will NOT be going to 900p because that would be the equivalent of the share price back in January 2020 being £18"

No it's not.

No idea how you worked that one out unless (unbelievably) you are saying double the number of shares means half the sp , which is obviously not true unless the additional shares were issues for free. I think it is you who is 'very confused about the price changes'.

"So if there was a 93% take up of the RI, it seems to indicate that Stelios didn't sell all of his rights !"

I don't think you can tell from this. The 7% appears to refer to those who allowed their rights to lapse (i.e. chose not to take them up or sell them). Those who sold them presumably did so to people who then took up the rights and so are included in the 93%.

It's 100mW each phase, not 50mW. Machines aren't included in the cost but would expect them to be in the timing (just funded from elsewhere).

"Phase 1 of this development is currently in progress, comprising and expected to be completed in the first half of 2022, and includes the electrical interconnection, infrastructure and machine hosting facilities that are expected to support 100 MW of power capacity using immersion technology, at an estimated cost of $50 million. Phase 2 of this development, which is expected to be completed in the second half of 2022 and is expected to support an additional 100 MW of power capacity using immersion technology, at an estimated cost of $30 million."

Again you try to mislead, "are we going to be around the recent highs of 1100" has no meaning now as 1100 pre-rights issue is not the same as 1100 post-rights so it is not the right number to 'get back to'.

If the price reaches 900 then this will mean we will be back to those recent highs and I believe this is likely. I invest because I think a stock is undervalued not because I think it will be X on date Y. I believe it will get back to those recent highs (so over 900 factoring in the RI) which is also around my current target exit price. I am hopeful that is before March but prepared to wait longer when the summer season kicks in. There are no guarantees though and plenty could go wrong (as you are so fond of pointing out) or right (as others point out) in the meantime.

The SP has fallen - but not in the last month (unless you're comparing apples and oranges).

If you think it's well overpriced then fine, act upon it. I don't think it is overpriced and its prospects look a lot better than they did 4 weeks ago (and by more than the 9% rise suggests). Beyond that I don't predict specific SPs on a certain date as that is crystal ball stuff and I can't carry off the outfit or the accent required for a fortune teller.

@Lambinator - the 86 BTC is a red herring as the original loan was subsumed into the new loan and on seemingly much better terms (just 4.5% p.a. interest - perhaps due to BTCs rise in the meantime).

Personally I think the IPO was the right way to raise funds, especially as it gives better exposure to US investors too, but the size of the discount was very disappointing to say the least. We don't know the whole story though and what is done is done. Key thing now is that we get some news soon on machines as this will have far more impact on finances than any shortfall from an underpriced IPO - if indeed it was underpriced.

"the general downwards trend continuing - down over 100 in the past 4 weeks alone"

Price close Mon 30 Aug = 809p
Price close Mon 27 Sep = 709p

BUT as you know, there has been a Rights Issue. 31 shares for every 47 held at price of 410p.

If you had 1,000 shares on Mon 30 Aug these were worth £8,090
If you took up the rights issue you would have paid an additional 410p per share i.e. 1,000 x 31/47 = 659 shares at £4.10 = £2,704

So would now have 1,659 shares which today is worth 1659 x £7.09 = £11,762 which is an increase in value compared to the total of that held 4 weeks ago and what has been invested since of 11,762 - 8,090 - 2,704 = £968 or 9%.

Not a bad return for less than a month (and a profit can also be shown if you opted to sell the rights). But I'm sure you know all this (it's been explained to you before). Happy to put up with your skewed opinions - obviously you have an agenda and that's fine - but not with statements that are deliberately misleading.

Hi Wolf - this should hopefully have all the info you're looking for:

"On 29 June 2021 the Group entered into a loan agreement with Galaxy Digital LP for a facility of US$20 million. The proceeds of the loan will be used, in conjunction with funds raised previously, to continue the build-out the West Texas data centre. The short-term loan is a Bitcoin collateralised loan against 795 Bitcoin initially with a further 86 Bitcoin transferred after the period end. It has a 6-month term and attracts an interest rate of 12.5% per annum."

"On 9 September 2021, the Company entered into an additional $25 million term loan agreement with Galaxy Digital
LP (New Galaxy Term Loan) to finance the continued build out of its new cryptocurrency mining facility in Texas
and other general corporate operations. The outstanding principal of the Galaxy Term Loan, in the amount of $20
million, was subsumed into the New Galaxy Term Loan, resulting in total borrowings of $45 million under the New
Galaxy Term Loan. The New Galaxy Term Loan will mature on 29 October 2021 and the borrowing fee on the loan
is 4.5% per annum."

Wolf - we do know how much was used as collateral for the first loan as this was described in the interim accounts and was initially 795.

To repeat - they've already done this and I think used up most of their HODL as collateral in doing so. It only raised $45m (and from memory over 700 BTC was needed as collateral for the first $20m). They can't use the same asset as collateral twice - obviously.

They did it with a specialist providers as I presume most banks would see BTC as too volatile an asset to use as collateral (not without the heavy discounts mentioned before).

ARB are only paying part of the Galaxy Loan from the IPO proceeds with the rest re-packaged and used to buy machines (and presumably further loans will be at least part of the approach used to fund the sort of machine numbers that Texas can accommodate). No alarms since, as previously stated by ARB, raises, loans and selling BTC are the three main options they plan to use to fund growth - and would be strange if they ruled any of them out.

"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."

....err they've done the whole loan using BTC as collateral bit already with Galaxy. They're using part of the raise to pay some of it back.

SF - you actually don't miss out on the 'discount' whichever option you take. For example if the SP at the time you exercised the option was 600p you were choosing between a 190p discount or 190p to sell the options. The word discount though is a bit misleading as the discount in the new shares is offset by the reduction in value of the old shares - you're not unfortunately getting something for nothing or any kind of bargain. But some do see it this way and will, I agree, very likely sell.

There will probably be some temporary selling pressure when people are able to trade their new shares, especially with the sp holding up so well despite the RI (not because of it) and it looking like such a quick and chunky profit since those shares were purchased at just 410p.

In reality the profit is not that large but the fact that the price is now above the theoretical ex-rights price (of 638p) at all is impressive and surprising - due mainly I guess to the easing of travel restrictions and some takeover speculation. Not so sure how much credibility the takeover rumours have but the easing of restrictions are hopefully here to stay (and will be relaxed further) and with a much stronger balance sheet now EZJ should be in a better position than they were to take advantage.

I don’t think that follows as they still represent the same thing and any gaps in price .that do open up will be quickly closed through arbitrage. Would be good to see something definitive either way but as I said, I’m not sure it really matters.

Hi AB - I'm not sure if the ADS and UK Ordinary Shares are quite as interchangeable as you suggest. The OTC are certainly the same UK shares, just traded in a different place/way, but the impression I get is that the ADS are separate - for example they don't have the same rights as UK shares and are all held by a depositary (JP Morgan), though I think they can still vote (albeit via JPM).

Whether though this means the number of ADS is fixed at 7.5m (or up to 8.625m if underwriters take up their option to purchase more) or whether all UK shares can effectively be parceled up as ADS I don't know but everything I've seen suggests to me the former - but could easily be wrong. I'm not sure though how much difference this makes to liquidity and prices should always remained aligned - so not sure it matters that much anyway?

TF123 - I'm afraid there's not a lot of info available on the state of play of potential new machines other than that which was in the RNSs posted earlier. This note in the interim accounts is the only update since that I've seen:

"Mining equipment prepayments consist of payments made and due on mining equipment due to arrive in Q3 and Q4 2021. Payments to ePIC ASIC Asia Limited comprise £3,429,826 and the balance of £32,041,673 was paid to Core Scientific Inc in advance of machine purchases to be received after the period end." - where period end means 30th June.

So hopefully we'll here about the installation of the 530PH mentioned in the June 3rd RNS very soon but no idea what has happened to the 80PH that was due in July or what can be expected now from ePIC.

Maybe others have more info? Btw I'm in the camp that believes that any quiet period does not affect news on new machines but others believe there will be radio silence on them so it is possible we won't get any updates for some time.

Chuz - I think we're in danger of tying ourselves in knots over this but I believe what you are quoting relates to information that is being disclosed to some investors and not to others (e.g. I suppose when bookbuilding and for those partaking in the IPO). This appears to be confirmed by the word 'normal' in the passage you reproduced and by this part that preceded it.

"In United States securities law, a quiet period is a period of time in which companies refrain from communicating with investors to avoid unfairly disclosing material, non-public information to certain investors when the company has not yet publicly communicated this information."

So I would tentatively conclude that we will see normal communications continue - after all if there was no monthly update there would probably more impact on sp from its absence than there would be from whatever may have been in it!

Chuz - I think you're referring to the one that Sprog already replied on and which according to the accounts we have already handed over the money for (£30m+) and are just awaiting delivery.