The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
Another reason why I hedge my Argo Shares with $ARBKL ,
I would rather buy $ARBKL Bonds for $11 (Up to $18), than keep buying $ARBK for $2 or above.
I already own a good amount of shares in Argo, but would like to rotate them into ARBKL, if it wasn't in my ISA as ARB.L
Anyone else looking forward to the Spot Bitcoin ETF approval deadline week, Jan 10th is the deadline for ARKB BTC ETF.
I'm wondering whether to buy a bigger stake in ARB or Miners based on chances of Approval in the next 30 days.
Yes, I believe there was a lot of hopism and optimism in Argo,
Comparable to the Bitcoin Miner market, I believe Argo has a long way to go to reach top 5 bitcoin miner levels.
I do believe in their sustainable mining thoughts, they just haven't accomplished it.
BTC Miners market caps are between $50M to $2Bn.
I believe the next bull run, they'll 2-5x dependent on size.
Yes, they mentioned Debt/Capital raising were improving,
and that they're in talks for sale of non core assets and in talks for new partnerships,
I think they're going to be able to maintain the status quo from Q2, Q3 into Q4.
I personally think they are trying to gear the company up for M&A,
Low Share price for 12 months, Increasing Insider Shares in Vested periods, and decreasing debt by $1M a month,
If total debt is below $50M, and BTC production is 1k a year pre halving and 500 a year post halving, with a $50M market cap..
Argo has potential Takeover for 25% above 12 month SP, The question is whether there are any BTC miners that want to expand their EH production exponentially before the halving,
2.8EH for $60M might be attractive to someone, thats ~$20M per 1EH.
Yes the miners are old, but I think 2024 will be determined on who can sustain post halving, and it will depend on margins.
I do believe if someone were to make an offer, it would be by Jan 24. Otherwise, Argo would need to pray BTC Moons in the run up to Jan 24 BTC ETF approval decisions.
Yes $70M debt with $40M bonds,
That is why I hedge my share allocation $ARB with Bond allocations $ARBKL.
$ARBKL, $6.8 price, returns $0.546 per Quarter, ~8% per quarter.
The Risk/Return matrix thought is, if the company goes bankrupt, I should be able to get back some $ from bonds, and I'll make some % every 3 months.
I'm not what the best ratio for buying shares to bonds is, But for 2023, Argo Bonds gave me a better return than Argo Shares.
The assets and equity was lower than I expected and The total liabilities decreased. All in all, I'm content with this report and it is inline with what I'd want for the next 6 months in the run up to the halving.
I think BTC will stay at $30k - $40k range for the next 3-6 months, so Argo will have better liquidity. I am happy that Long term Loans and borrowings are decreasing by $1M a month, from $25M Dec 22 to $16M Sep 23.
I don't see another equity raise occuring until Mar 23, So I intend to buy some more shares over the next few months, not much just whatever I can spare in my ISA.
I'm expecting Assets to increase as 900PH was delivered, Up by $5M, since H1 23 result.
$1k per 100 TH? So 900PH should cost $9M?
I'm expecting Equity to increase by $7.5M atleast due to Jul 23 fund raising.
I'm expecting Liabilities to decrease, Down by $5M, since H1 23 result.
They raised $7.5M to pay off some liabilities, and 3 Months Loan ammortization should be around $2M?
Q3 23 results will determine whether people - I - will invest more in time for 2024.
I'd hope some talk on growth too, Fingers crossed they continue business with Epic, for some more machines....
Thoughts on Argo buying back Unsecured Bonds to lower OpEx and make themselves attractable to potential M&A
Currently, $40M is >50% of the debt Argo has.
(a) Unsecured Bonds:
In November 2021, the Group issued an unsecured 5-year bond with an interest rate of 8.75%. The bonds mature
on 30 November 2026. The bonds may be redeemed for cash in whole or in part at any time at the Group’s
option (i) on or after 30 November 2023 and prior to 30 November 2024, at a price equal to 102% of their principal
amount, plus accrued and unpaid interest to, but excluding, the date of redemption, (ii) on or after 30 November
30 and prior to 30 November 2025, at a price equal to 101% of their principal amount, plus accrued and unpaid
interest to, but excluding, the date of redemption, and (iii) on or after November 30, 2025 and prior to maturity, at
a price equal to 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the date of
redemption. The Group may redeem the bonds, in whole, but not in part, at any time at its option, at a redemption
price equal to 100.5% of the principal amount plus accrued and unpaid interest to, but not including, the date of
redemption, upon the occurrence of certain change of control events. The bonds are listed on the Nasdaq Global
Select Market under the symbol ARBKL.
So they sold 50M shares, for £5M, To pay off some current liabilities due to Galaxy...
They should be left with $19M Long term to Galaxy and $30M long term to ARBKL Senior Notes,
They were authorized for another 400M shares... So I wonder if they will raise another $40M to pay off the remaining loans, or will they Start investing in new machines before the halving...
Q3 will be an interesting time.
My guess is, they want to Convert Debt Securities into Equity Shares,
They have 40M Senior Notes, 35M Galaxy Loan and Market Cap is 40M,
So if they can not afford the interest payments, I think they might convert Half the Debt into Equity, that will double the share count.....