Argo Blockchain Share Discussion Threads

[martywidget] 01/5/2024 11:00

JPMorgan had CLSK as their top pick last October, and have done reasonably well since then...

[1knocker] 01/5/2024 10:49

porky, there are posters (including me) who have many times explained in detail why ARB is a high risk low reward play. You do not need to hear it from Ken Chung to understand the negative case on ARB.

As I say, the bear case is well documented here. What I don't find posted, here or anywhere else, is a convincing bull case.

All the miners are an indirect bet on BTC, with trading and operational risk which is avoided by buying BTC. ARB is pure trading and operational risk, because it holds no significant quantity of BTC. The risk is high because ARB has a weak balance sheet, is loss making and is running out of runway. The reward is low, because even if BTC goes vertical, ARB has few BTC to appreciate in value. Thus, even if you want exposure to BTC through the mining sector, how is ARB the best way to do so? As I see it, the only (small) advantage it has (for us) over the other miners is that it is sterling investment, saving FX costs on buying and selling..

What is the bull response t that ?

[ken chung] 01/5/2024 06:33

Bitcoin only $59,970.

ARB are losing money.

[porky9] 01/5/2024 05:41

I do wish the poster @Ken Chung unless its a computer bot, would articulate their rationale behind their negative stance rather than just posting the same "bitcoin halved" event and "Lemmings and mushrooms" comment. Clear they are shorting.

The comments by @Broomrig i tend to agree with in so much that ARB faces massive energy costs to mine bitcoin and it looks more and more to me that there is an actual floor in the crypto currency structure policy with these halving events written in.

It is killing the very mining industry off that Crypto needs to survive. To think that ARB will face yet another half reward event in another four years doesn't bode well for it at all frankly. They need to reduce production costs now and will be under constant pressure to keep reducing mining costs again and again until its not even possible to do so. The rules must change as i see it.

As a side, I positively hate the fact that Bitcoin is effectively controlled by a handful of whales and do wonder if the event was written in to boost the pots of these whales, in principle if there is less of something the price should go up however what they didn't bank on was miners having to dump reserves to stay in business hence increasing supply whilst the price of bitcoin so ridiculously high now it may just have peaked hence whales selling chunks adding further downward pressure - jury is out on the future of Bitcoin itself but as for miners, it does kind of look like the landscape is bloody challenging for them that's for sure.

Think ARB could do with a black swan event, such as rules being changes for the future or a miracle way to reduce energy costs.....

[martywidget] 01/5/2024 04:34

BTCUSD YTD +35.81% 1 YR 113.68% 6M +69.27%

BITQ YTD (-9.18%) 1YR 68.14% 6M +47.00%
BITO YTD +16.99% 1 YR +59.27% 6M +46.09%
BTF YTD +23.09% 1 YR +59.91% 6M +36.41%
DAPP YTD (-10.73%) 1 YR 79.07% 6M +56.14%
WGMI YTD (-19.78%) 1 YR +45.39% 6M +47.53%

ARBK YTD (-58.51%) 1 YR (-1.42%) 6M +1.20%
BITF YTD (-36.97%) 1 YR +61.26% 6M +70.48%
BTBT YTD (-46.59% 1 YR +7.67% 6M (-3.10%)
BTDR YTD (-38.18%) 1YR (-25.31%) 6M +46.79%
CAN YTD (-59.49%) 1 YR (-68.18%) 6M (-54.43%)
CIFR YTD (-9.93%) 1 YR +77.14% 6M +11.71%
CLSK YTD +50.55% 1 YR +378.95% 6M +299.51%
DMGI YTD (-32.09%) 1 YR +51.67% 6M +26.39%
GREE YTD (-60.70%) 1YR (-41.74%) 5M (-47.04%)
GLXY YTD +16.80% 1 YR +142.00% 6M +75.62%
HIVE YTD (-42.14%) 1 YR (-16.72%) 6M (-16.99%)
HUT YTD (-37.62%) 1 YR (-5.30%) 6M (-27.56%)
IREN YTD (-36.18%) 1 YR +18.26% 6M +40.91%
MARA YTD (-29.96%) 1 YR +82.92% 6M +82.29%
RIOT YTD (-34.39%) 1 YR (-3.90%) 6M +3.37%
WULF YTD (-5.65%) 1 YR +29.94% 6M +95.50%

[zydecoco] 30/4/2024 22:52

Are Lemmings avoiding proximity to Mushrooms? Is the world actually not flat?Did people really land on the moon? Is David Icke really the messiah?Etc.

[ken chung] 30/4/2024 22:48

Bitcoin now only $60,172.

Lemmings and mushrooms only.

[broomrigg] 30/4/2024 16:55

Sales massively outweigh purchases today. How long can ARB stay above 10 pence?

[broomrigg] 30/4/2024 11:41

Bitcoin below 62,000 usd, so Argo currently pays more in "direct costs" to mine a coin than a coin is worth. SELL.

[topazfrenzy] 30/4/2024 11:39

Surprised this is not at 3p yet

[zydecoco] 30/4/2024 09:04

Hing King ETFs Crypto trading debut value dwarfs US, on its first half a day :* The trading volume of the newly listed spot bitcoin and ether ETFs in Hong Kong amounted to over $6.3 million during the morning session today, according to HKEX data.* In comparison, when the 11 spot bitcoin ETFs began trading in the U.S. in January, their daily turnover reached about $4.6 billion on the first trading day.Https://www.theblock.co/post/291606/hong-kongs-spot-bitcoin-ether-etfs-see-over-6-3-million-in-half-day-volume-upon-debut

[jaknife] 29/4/2024 23:28

At the current rate ARB is hopelessly loss-making. You can work it out yourself by taking last year's numbers and projecting them forward for 2024.

Revenue last year was $50.4m. The halving took place on 20th April and so, very roughly, you could assume four months at the same rate as 2023 and then 8 months at half that rate, hence:

( 4 / 12 + 0.5 x 8 / 12 ) x $50.4m = $33.6m

= ARB's forecast revenue for 2024

power and hosting costs for 2023 were $28.8m (assuming that the "power credits" were converted to cash)

and operating expenses were $19.3m

you don't need to go any lower in the P&L to see that ARB is now hopelessly loss-making.

JakNife

[caveater] 29/4/2024 23:08

Or not.................Ker Ching !!!!

[ken chung] 29/4/2024 22:53

Bitcoin now only $62,880 and the mining reward recently halved from 6 to 3 bitcoins per winning block.Are ARB on a trajectory to go bust at that level?Lemmings and mushrooms only.

[broomrigg] 29/4/2024 20:22

The whole mining sector having a very rough session across the pond. ARB first to go bust?

[noirua] 29/4/2024 14:29

If ARB is taken over or merged with another company it is most likely to be Bitfarms that mines in Quebec BITF. At about 10 times the market cap of ARB it appears a reasonable likelihood.

[tenapen] 29/4/2024 06:20

Hahahahaha

It's getting boring reading the same prophet of doom posting the same opinion over and over and over and over .....
And yet the share price stays strong.

[broomrigg] 29/4/2024 06:11

Only a few days left to sell ARB before the next operational update, which is likely to be dire.

ARB stated the "direct costs" of mining each coin was 31,000 usd pre the halving so now it is 62,000 usd. They didn't mention the indirect and therefor total cost of mining each coin but at the current bitcoin price it looks like this business is going bust.

[1knocker] 28/4/2024 21:21

I am out of ARB, and have ben saying for some time that it is un-investable. As I read them, the results give chapter and verse for my reasoning.

I have yet to see a convincing case for investing in ARB, even if the mining sector is a good bet. On any metric yu look at, it is the runt of the litter. I don't see that the opportunity to buy in sterling, saving FX costs and cutting out potential exchange rate risks ( and potential rewards) begins to make ARB the go to miner, even for sterling investors.

For those who favour the minig sector because of their BTC holdings (1) ARB has almost none and (2) if you want exposure to BTC, buy BTC, not a miner.

[one_frankel] 28/4/2024 17:15

Your penultimate paragraph is exactly whats going to happen here JakNife and there's only one potential person/party that will benefit ultimately and thats Novogratz/Galaxy!

[jaknife] 28/4/2024 14:32

Here’s a quick journey through ARB’s finals that were released last week:

1. P&L
* Revenues are down 14% at $50.6m, the company says ”driven primarily by a significant increase in the global hashrate and associated network difficulty level.” Note that these are for the year ending 31 Dec 2023 and so don’t include the effect of the recent halving from just over a week ago.
* Gross profit is $3.8m, noticeably there is little movement in the fair value of crypto assets as ARB no longer hold significant crypto on balance sheet. “Digital assets” at year-end were just $385k, which is significantly lower than the $109.0m that ARB held going into 2022, during which it sold nearly all of its crypto.
* ARB highlight the depreciation that makes up the gross profit line ($18.7m), which is a helpful reminder of this non-cash item.
* After operating expenses of $19.3m and (non-cash) remuneration paid by shares of $4.0m there’s an operating loss of $19.4m
* And then finance charges and other costs bring the P&L to a loss after tax of $35.0m

The P&L basically shows a loss-making company further weighed down by the burden of interest.


2. Balance Sheet
* The main asset in the balance sheet is property, plant and equipment ($59.7m), cash is down from $20.1m at the start of the year and is now just $7.4m
* On the other side loans and bonds total $62.5m of which $14.3m is current (ie due within 12 months of the balance sheet date). Note 25 explains that the “Galaxy loan” is repayable on an amortising schedule.
* Net equity has declined from $24.6m to a mere $158k


3. Cash Flow
* The business does generate a small amount of cash from its operating activities ($3.8m in 2023) but once you factor in interest at $10.7m and loan repayments of $14.1m it’s cash burn city! And if you half the "Revenue from digital assets" then you can get a glimpse what the cash flow will look like from April 2024 onwards.


4. Conclusion/Forecast
ARB wasn’t profitable in 2023 and it will get even worse in 2024 following the recent bit coin halving. If you look at the numbers for 2023 then you could imagine a mildly profitable company *IF* the bonds were converted to equity.

However allowing for the bitcoin halving, even if the bonds were converted to equity, then ARB would still make a stonking loss in 2004. And the big thing is that ARB’s bitminers are rapidly becoming inefficient and obsolete but ARB isn’t generating enough cash to replace those bitminers!

ARB’s equity is ultimately worthless, the business will never generate adequate cash to provide a return to equity, if it generates any sort of cash then all of that cash is going to go to service the debt. They could look to recapitalise the business by converting the debt to equity, at a price that wipes out current equity, but even then the business isn’t going to generate a profit without a substantial slashing of expenses.

Regardless, something needs to happen soon as ARB must be running on fumes!

JakNife

[jaknife] 28/4/2024 14:08

^^ The chart for ARB's bond, which trades under the ticker ARBKL and (confusingly) has a nominal of $25!

[one_frankel] 28/4/2024 11:54

Not that I follow EW folks but it seems BtC maybe heading lower in the short-term before that much anticipated x'plosion!

...

[tenapen] 27/4/2024 19:49

And yet the share price stays strong.



Off topic but interesting ! If your interested!