Member Info for WolfofWarks

I’ve just re-read the RNS yesterday and there is no mention of 12% from what I can see.

Where has the 12% figure come from?

I’ve just re-read the June RNS and it didn’t state the APR of the original loan, so my assumption that the whole $45m is at 12% appears incorrect when compared to what the NASDAQ listing says, correctly pointed out by Hexam.

So my theory now would be that the first tranche of borrowing must have been at extremely favourable terms or heavily over-collateralised if both loans balance out to 4.6% per the filing.

I guess the point I’m making is that you’re still paying 12% albeit over a pro rate number of days therefore the idea of 1% per month is misleading.

It would be like saying rather than paying 2% on the mortgage you are paying 0.17% when interest is always expressed as an APR.

He amnesia - the number of days is usually either 360 or 365 depending in lender.

So for example if we had the loan for the whole of September the interest charge would be;

$45m x 12% x 30/365 = $443,836

‘With our high street banks charging anything up to 40% for an overdraft, it underlines the benefits of bitty.’

Hi 600T - a corporate with an agreed overdraft wouldn’t be paying that for an authorised facility. That’s when the bank grabs us consumers by the goolies for going overdrawn unauthorised.

Most conventional corporate borrowing facilities are usually based on a margin plus LIBOR rather than the conventional base rate.

I’ll caveat that with things are obviously being done very different in the crypto space and the platforms and lenders are definitely having their cake at the moment.

Guys seriously that is not how interest is calculated.

The 12% applied to the base loan and then multiplied by number of days/365.

It’s appprox $450k interest a month depending on number of days within the month.

It depends on the what the considered credit risk of ARB comes along with many other factors such as the strength of our balance sheet (underpinned by value of crypto assets).

As we show continued growth and profits, dual listing, etc, you would hope our rating would increase and we would become a safer bet for lenders. This of course would be the case with conventional lending, but how this transpires to lenders specific to the crypto space I’m unsure. Interest at 12% is eye watering for me and everything I have read regarding crypto lending and the collateral involved suggests is usually well in excess of base loan. It would be interesting to know how much btc has been fixed against the $45m.

“What from Charlie Mungers 4 filters did you apply?”

Kallu - Buffet and Munger have under performed the S&P for a decade …..

What was it the other day you were preaching about active fund managers?

I think you might have a touch of the ol’ bipolar there.

“ Should BTC drop to July levels or lower ($33k) when the loan is due for payment and lets say the NASQUACK money has not landed presumably Argo could be in a position where they have to sell all their BTC to cover the loan....”

Surely they would just re-finance it. Most companies have debt in their balance sheet, they just refinance either with the same or a different lender, especially if better terms become available.

You’ve probably got to be looking at running the latest machines though right? Think how quickly the performance drops in something like the iPhone compared to newer models in a relatively short space of time.

Our data centre is only a couple of years old and there IT guys are already looking at replacing it with something cloud based as the tech has changed/ been advanced.

If you want an idea of what PW considers ‘useful life’ the biggest clue is the write down period in the accounts. Not an exact science and can be broad brush nonetheless.

Hi sprog - that’s not how interest works. It would be $45m x 12% x no of days/365. The interest payments are $450k per month, or around £325k, or around 10 btc.

The funding will be ongoing. We’re not going to have all the funding in place now for the entirety of the project. I expect it to go up and down according to cash needs.

What’s become clear is if we are paying 12% interest on this current round of loans then for me that’s an eye watering rate and suggests we might be running out of options with regards to who will lend us money or it might well be that a crypto related debt on the books is not palatable for the major lending institutions.

Blubay - it’s a gamble. Btc could just as easily crash back to $30k. This is where risk needs to be hedged and we utilise everything available to us. If we just hold btc we are completely at the whim of the market and the simple fact is we need fiat to clear out obligations.

Just focussing on debt leaves us vulnerable and dilution is the other option but what about the SP?

We can still hold/trade btc but should make hay while the sun shines.

It’s says in the RNS it’s for the Texas build out and working capital.

This is one of the reasons why I think it makes sense to be selling some of the hodl regularly otherwise the alternative is the other two levers being pulled - continual debt and dilution needed to keep the light on and progress the Texas build. At the end of the day other than some management being paid in btc all our liabilities are fiat.

Hey look no disagreement here just a healthy exchange of opinions.

I managed 250p on the last dip in July

Cane - Argo went to a specialist lender that would take crypto as collateral. Would it be available to ordinary Joe off the street?

Flower - it’s not about having the key it’s about the value of that collateral as security. Think about the differing valuations just in the last twelve months. The range is $18k to $64k, on top of that the dollar has been between 1.27 and 1.42. How could any organisation lend to a consumer with those variables and consider themselves a responsible lender.

It’s the likelihood of an institution lending you money against what is essentially a ridiculously volatile asset.

There’s no security for them and in the case of the borrower if events turn against them they would face owing back some serious money, with no saying the asset will be there to make good the initial loan plus interest.

I bet the principle of it but the reality is completely different.

I don’t understand Eddie

I’ve bought three tranches now and they all took seconds.

I’m only doing small amounts though as I’m playing with it.