The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
A mix of debt, proceeds from selling BTC, and capital raises.
The Chuz has given a good example of what I have previously suggested re the company actually using the markets effectively.
This could equally be done with selling and re-buying Bitcoin, and MARA did precisely this earlier in the year. Or raise debt now and sell BTC whilst it’s high to pay off the debt.
Ultimately, asset management is about buying low and selling high, and a good asset management strategy makes the most of all avenues for generating income and growing the business.
The IPO wasn’t poorly timed, it was poorly executed. Excessive discount and confusion between NASDAQ and OTC has demolished sentiment.
I really hope PW has learned his lesson; you can’t keep picking shareholders’ pockets at will (and at a major discount) to grow a business. I think he was ill advised by his rent-a-CFO and whoever else was advising re the IPO.
I hope he goes on the ‘Charm offensive’ that he mentioned on Twitter from next week. Some director buys would be welcomed too.
Also, one of the key things holding miners back is an established valuation methodology.
Everything I have seen so far is utter rubbish - as ‘analysts’ currently seem unable to include all the relevant variables in their models.
Ultimately, a big system dynamics model is needed to estimate total global hashrate, and individual miners’ modelled hashrates can then be used to estimate monthly/annual BTC production. Link this up with Plan B’s price estimates, and you can then build a DCF model to calculate reasonably robust P/E ratios.
I’d be surprised if someone somewhere hasn’t already built the hashrate model.
I think total hashrate will increase several-fold, but not at the rate people expect. I think a lot of small scale miners, inefficient miners, and miners powered by fossil fuels, will all drop off the network - either through lack of profitability, consolidation or regulation. I think MARA and RIOT will lose a lot of their hashrate in the next 5 years due to the latter - or end up paying for new facilities powered by renewable energy.
I think ARB are well placed to remain in that top-tier of miners and will survive all the competitive forces that will reshape the sector in the next 5 years.
Didn’t Peter Saylor say that the sector is eclectic to grow by at least 30x over the next 5 years; many miners will fall by the wayside, but I think ARB will be one of those miners that achieves the 30x.
2 things to bear in mind:
- Forward P/E of 10 is low for the sector.
- Forward P/E of 10 requires us to make assumptions about the price of Bitcoin over the next 10 years
Plan B’s S2F model suggests BTC will reach $1m following the next halving so in 4 years. That’s 15x the current price. Even if the block reward halves, that’s 7.5x revenue. And similar will happen again 4 years later.
i calculated about 120 per day earlier in the year.
It’s peanuts relative to the Bitcoin mining. ZCash was outperforming Bitcoin earlier in the year, but it has dropped off massively.
If ZCash significantly outperforms Bitcoin then that should be another catalyst for SP growth - I can’t see it happening though.
Surely SP is highly dependent on BTC price… the forecasts must surely make an assumption re mean BTC price? And I presume their BTC price assumption is hugely conservative.
If not, they aren’t worth the paper they’re written on.
I’ve generally been aiming for the following;
SP in pence ˜ monthly BTC mined * (BTC price in $/50000).
The dilution scuppered that though.
I think the vast majority of investors are reactive; they don’t understand Bitcoin mining and only look at BTC mined and BTC price. I don’t think Texas hashrate is priced in currently, probably because the market doesn’t have much confidence in that hashrate being achieved.
I think Suresh alluded to something along these lines last night too.
What I’ve been wondering is there’s another deposit nearby, but connected to Havieron, do NCM get a 70% share of that too?
What determines whether a deposit is part of a larger deposit or entirely different?
Well, that’s as convincing as it gets… Havieron will get significant resource upgrades, NCM just want to get it mined ASAP. Mine life will be extended and/or processing will be upped.
Life-changing investment opportunity, even after so much SP growth over the past 18 months - I think we all knew this though. Let’s see how the market reacts tomorrow.
In fact, you’ve probably just unintentionally ramped ARB.
Energy costs are expected to stay high for 6+ months, and may not even fall.
Texas, powered by greeen energy, with the latest Antminers and immersion, could well be the most efficient BTC mining facility in the world.
If energy costs stay high, and BTC price crashes post-bull run, then a huge amount of total hashrate will be switched off and ARB will just pick up the slack at a profit.
Mara, RIOT, Hut8, HIVE, only Bitfarms comes close, would all be loss making well before ARB would be.