Hello Everyone,
I’ve been a reader of this board and a viewer of Deadnsyde’s for quite a long time. I love this community and really enjoy all the research and value that everyone is contributing here. I told myself I would never pitch a stock here unless I thought there was tremendous unrealized value. I’m not here to make a few bucks, but to identify, analyze, and create multi-bagger opportunities.
I spent 4 years in Investment Banking and spent the last 6 years in Private Equity investing in and building companies that are fundamentally sound and have the ability to scale and grow very quickly. I’ve become very good at identifying these types of opportunities and wanted to share my findings on the following company.
Bitfarms LTD (OTC:BFARF). The company is one of the largest cryptocurrency miner's in North America. They've been expanding rapidly over the last few years during the emergence and growth of Bitcoin and other related cryptocurrencies. As worldwide adoption of Bitcoin and other cryptocurrencies emerge, the value of the company will exponentially increase based on their ability to mine bitcoin at extremely high margins.
I firmly believe that this company is severely undervalued relative to their public comparables (i.e. $RIOT and $MARA) and has the ability to 5-10x within the next 12 months.
CURRENT PRICE PER SHARE: $5
PRICE TARGET BY YEAR END: $35+
Bitfarms current market capitalization of $510 million USD (currently 1.2 exhash power or 9 BTC per day)
$MARA current market capitalization of $3.72 billion USD (currently 0.7 exhash power or 5 BTC per day)
$RIOT current market capitalization of $3.98 billion USD (currently 1 exhash power or 8 BTC per day)
CATALYSTS
· UPLISTING TO NASDAQ IMMINENT – Massive increase in exposure, volume, and new traders – potential 2-4x on up listing. This is the single greatest catalyst for this company. If Bitfarms were to trade by the same metrics as MARA and RIOT on the NASDAQ, it would be trading at a similar valuation (which would be in the ballpark of $25-30 per share).
· Mining same amount of btc per day as riot but trading at 1/8th of the valuation
· Heavily shorted (short squeeze potential)
· Aggressive expansion to 8.0 exhash (65+ btc per day)
· Massive growth of Bitcoin pricing
· Massive adoption/demand for BTC by billionaires, corporations, wall street investors & financial institutions, and retail investors
· Increase in infrastructure/power in MW outshines competition
FUNDAMENTALS
· The current Price of Bitcoin at the time of this writing is $57,000.
· Bitfarms Current Cost to Produce a Single Bitcoin: $7,500 (source: bitfarms.com)
· $49,500 (86.8% margin) gross profit per bitcoin before other expenses.
· Number of bitcoins mined per day at current 1.2 exhash computing power: 9
· $513,000 per day, or $187 million in revenue this year at current prices. I think a $100,000 bitcoin is entirely possible by the end of this year.
HEAVILY SHORTED
The shorts have been attacking this stock ever since BTC had the 27% correction from $58,300 to $43,000 at the end of February.
If you look at the following picture you can see that the number of shares short relative to daily volume are extremely high. Upwards of half of all volume are shares sold short. Clearly this stock is heavily manipulated to the down side. I believe if we get enough buyers and volume to the upside we can create a massive short squeeze and finally allow the stock to breakout to its recent high of $8.50.
NEWS
In a recent press release, the company recently announced they will expand to 3.0 EH by the end of this year (yielding 25+ BTC per day) and recently made a MASSIVE order for 48,000 miners to be delivered and installed by the end of 2022, which would bring the exhash computing power to approximately 8.0 (which would result in approximately 65+ BTC per day).
From the companies recent press release:
(https://bitfarms.com/app/uploads/2021/03/Bitfarms-Press-Release-March-2-2021.pdf):
“The mining equipment has been sourced from MicroBT (http://www.microbt.com). MicroBT has become our supplier of choice. Over the past eight months we have acquired over 12,000 of their mining rigs. The MicroBT miners are the most reliable, efficient, and consistent miners within the Company’s fleet. We anticipate the initial shipment of miners to take place on or before January 2022. Thereafter, miners will arrive monthly with the final mining rigs expected to arrive in December 2022. The miners will be installed at our existing and new facilities which are currently in development. In the event market conditions change, Bitfarms has negotiated certain delivery and contract adjustment options. Once the above-noted miners are fully deployed, along with the current and planned addition of new miners in 2021, the production capability of Bitfarms mining fleet is expected to grow from over 1.0 EH at the present time to 3.0 EH by the end of 2021 and then to exceed 8.0 EH by the end of 2022. Utilizing the latest generation of miners, the increase in our hash rate by a factor of eight will increase Bitfarms’ global market share and substantially increase the number of Bitcoins earned on a daily basis. In addition, the subject miners are rated to achieve high levels of performance while consuming less electricity than earlier models. Bitfarms has always been an extremely efficient mining company and with the addition of these productive miners and greater scale, our corporate efficiencies are expected to set a new performance standard.”
COMPETITIVE ADVANTAGES
- Extremely skilled and experienced management team
- BitFarms utilize cheap hydro-electricity and have long-term contracts with the utility provider for consistent and inexpensive power delivery to their 5 warehouse locations Quebec, Canada.
- Geographic locations in Quebec, Canada allow for them to keep the operations cool much more efficiently and at lower costs, resulting in more efficient operating temperatures for their miners.
- Vertically integrated
a. They own an electrical contracting company which is available 24/7 to install, maintain, and upgrade their infrastructure, keeping their operating costs down.
b. They have on-site repair specialists who are available 24/7 to repair any equipment/miners that go down
c. They have advanced software that detect inefficiencies and laggards of miners, and enables onsite repair to optimize the weak chains and increase performance
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