- Unrestricted bitcoin holdings were approximately 3,464 BTC with a fair market value of approximately $71.0 million
- Unrestricted cash on hand was approximately $52.1 million at October 31, 2022
They had $89M in unrestricted cash at the end of June 2022. In four months it is now $52M. Energy and hosting costs were $13.7M, but this includes low-cost power contracts from Compute North prior to their bankruptcy. GS&A were 12.3M. Interest expense was 3.7M. These are all cash charges.
Their 10-Q is due now on 11/4, so you can't see the total outstanding shares versus authorized shares. Their authorized share increase vote failed to pass.
At the time of this post, the 3464 in unrestricted bitcoin has a current value of $54.8M.
Let's assume they can produce the same 615 bitcoin per month for the next three months and also assume the costs to run those rigs increases by 60%, since the last that I can tell Compute North was hosting between 200 MW to 300 MW in their 18-month deal announced in May 2021. That would be around the 7 EH/s that they are claiming.
They will generate $29M in revenue from bitcoin awards (at 15800) with expenses around 29.7M. How are they going to fund future miner deliveries and the coupon payment due in December on their 650M notes? They are running on a skeleton amount of cash.
They had 113M shares issued on 200M authorized at the end of June. Short-term debt as of 6/30 was $90M and long-term debt was $759M. They also sold $161M worth of stock in Q2.
Their notes that they brought to market in 2021 are convertible. As far as I know this means that they need to hold back some of the authorized shares in the event of conversion (unlikely) and not issue them.
Do they still have the $100M LOC on bitcoin? If so, does anyone know the terms and requirements for additional collateral? LINK: https://www.coindesk.com/markets/2021/01/25/crypto-miner-marathon-patent-group-buys-150m-in-bitcoin/
If they're still holding those coins then they have a liability that is 2X the FMV of those coins purchased (in banker's term, their LTV is 50%). If their LTV terms are around 75% then they're going to have to post additional bitcoin as collateral which they can't afford to provide unless they're tapping into the new LOC that was established at the end of 2021.
Their 10-Q is going to tell the story much better than I can but we have to wait since the Compute North bankruptcy provided the perfect cover to delay it until the 14th.
Bitcoin might be running through its issues but having over $200M in cash at the end of September and all of it unencumbered is a much better spot in my eyes than what MARA may be facing.
As I've said in the past: this crypto winter will have casualties. The belle of the ball might be one of them.
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