RE:RE:RE:RE:Bad TiminingMaybe if you actually opened up the last financials and did some actual thinking, you could have understood why Hive is close to breakeven at current prices. But instead because you didn’t, you just lost further credibility, look like an idiot in the process and that probably explains why you have 36 ignores.
So you claim that Ethereum needs to be multiples of here in order to be profitable. Well Ethereum currently sits at $285, and multiples would typically be 2x or more, so that would that would put your claim to at an Ethereum price of $570. So let’s go to the financials as you say we should.
If you extrapolate their results for the 3 months ended December 31st using current data… Today's crypto prices - at least 50% higher, today's energy prices (about 50% lower), their new depreciation rates factoring the Q3 writedown will be (about 25% lower).. Hive should be mining at close to breakeven.
Results from Q3
Q3 revenues (when Etherum averaged $226 and bitcoin $7,124 revenue generate) - $8.5 million
Operating and maintenance costs - $10.7 million
Depreciation – $9.4 million
Using today’s data
Revenues – Ethereum is now $285, bitcoin is 12,897 – revenues would be $13 million
Operating and maintenance costs now that energy prices have since halved. Assume operating and maintenance is 70% of last quarter - this number would drop to 7.5 million.
Depreciation - 9 million (with the impairment recognized last quarter, depreciation will be lower each quarter going forwards by about 25%). Depreciation should be 7 million.
Loss from mining $1.5million = 11%. But this doesn’t take into consideration the increase in mining capacity brought on partway through Q3.
So you next question, how will Frank replace the rigs? Well… They could sell some of the digital currency they have on their balance sheet which was valued at 10.4 million at December, but which is worth 16.3 million in today’s dollars. Or they can use some of the positive cash flow from operations (based on Ethereum prices of $285). Afterall, the net loss from mining of 1.5 million calculated above is made up of non-cash depreciation of 9 million so actual cash generated from mining would be 7.5 million…But then we’d have to deduct the whopping 1 million in G&A costs that you point out I need to look at which would bring that figure down to 6.5 million.
Lastly, yes you are correct. Analyzing the financials isn’t rocket science but clearly you completely failed in your analysis of them.