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Crypto Stocks Back on the Move (MARA, RIOT, ISWH, HVBTF)

In the Bitcoin rally that reached $20,000 in late 2017, there were many predictions as to why it was destined to surge much higher. But, alas, the pundits were wrong – their theories, proven outlandish. Then came the crash and long and arduous multi-year bear market.

But the sun has risen once again on the crypto space. And this time around, the price targets are the same, but the people talking about them are very different. Paul Tudor Jones, Raoul Pal, Michael Saylor, Jeffrey Gundlach, and other luminaries are on board this time around. They have sharp minds with financial and economics acumen, and the arguments in place now are less far-fetched, and backed by major companies that can help drive the trend, such as Square (SQ) and PayPal (PYPL).

In addition, besides widespread adoption theories, there are also macro tailwinds. Bitcoin, it is thought, will join Gold and Silver as a key beneficiary of negative real rate environments (when interest rates on sovereign debt pay out under the forward inflation rate predicted by inflation protected securities). At present, real rates and deeply negative, offering additional fuel for the fire.

But chasing the coin might now pay out that much over the near term given the huge run we have seen in the past two months. So, interested investors are hunting for equity plays with ties to the crypto space to capitalize on the trend.

With that in mind, we take a look here at some of the more interesting names in the space, including: Marathon Patent Group Inc (NASDAQ:MARA), Riot Blockchain Inc (NASDAQ:RIOT), ISW Holdings Ord Shs (OTCMKTS:ISWH), and HIVE Blockchain Technologies Ltd (OTCMKTS:HVBTF).

 

Marathon Patent Group Inc (NASDAQ:MARA) is a digital asset technology company that mines cryptocurrencies, with a focus on the blockchain ecosystem and the generation of digital assets. It is also one of the mainstays for traders seeking equity exposure to the bitcoin bull market.

The company currently operates its proprietary Data Center in Hardin MT with a maximum power capacity of 105 Megawatts. Once fully deployed, the Company will have 21,500 Antminer Bitmain S-19 Pro Bitcoin Miners in operation at this facility. The Company also owns 2,060 advanced ASIC Bitcoin Miners at a co-hosted facility in North Dakota.

Marathon Patent Group Inc (NASDAQ:MARA) most recently announced that it will be participating in Bitmain’s Mining and Investment Summit 2020, which is being held on Tuesday, November 24, 2020.

The Mining and Investment Summit 2020 brings together the leading companies in the fields of cryptocurrency mining and digital asset financial services. During the event, Marathon’s CEO Merrick Okamoto will be participating in the “Operations and Investment into Mining” panel, which will commence at 11:40 a.m. Eastern time on Tuesday, November 24th. Interested parties may register for the event using this link.

Even in light of this news, MARA has had a rough past week of trading action, with shares sinking something like -16% in that time. That said, chart support is nearby, and we may be in the process of constructing a nice setup for some movement back the other way, given the strong recent trend in play.

Marathon Patent Group Inc (NASDAQ:MARA) generated sales of $835K, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 191.9% on the top line. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($17.7M against $1.1M).

 

Riot Blockchain Inc (NASDAQ:RIOT) specializes in cryptocurrency mining with a focus on bitcoin. Riot also holds non-controlling investments in blockchain technology companies. It is also one of the most readily identified on any list of stocks in the crypto space, making it a popular stock for traders actively involved on a thematic basis.

Riot is headquartered in Castle Rock, Colorado, and the Company’s primary mining facility is located in Massena, New York under a colocation agreement with Coinmint.

Riot Blockchain Inc (NASDAQ:RIOT) most recently announced that Hubert Marleau has been appointed to the Company’s Board of Directors, effective today, to fill the previously announced vacancy.

According to the company’s release, Mr. Marleau, age 76, is a veteran capital markets professional, corporate director, and Chair of the Marleau Lecture Series on Economic and Monetary Policy at the University of Ottawa. Currently, he serves as Chief Economist at Palos Management, a boutique investment management firm headquartered in Montreal, Canada. In addition to a career in the capital markets that has spanned over five decades, Mr. Marleau has previously served as a Governor of the Montreal and Vancouver stock exchanges, and as a Director of the Listing Committee for the Toronto Stock Exchange and Director of the Investment Dealers Association of Canada (now known as IIROC).

If you’re long this stock, then you’re liking how the stock has responded to the announcement. RIOT shares have been moving higher over the past week overall, pushing about 12% to the upside on above average trading volume. Shares of the stock have powered higher over the past month, rallying roughly 182% in that time on strong overall action.

Riot Blockchain Inc (NASDAQ:RIOT) pulled in sales of $2.5M in its last reported quarterly financials, representing top line growth of 41.6%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($39.1M against $1.3M).

 

ISW Holdings Ord Shs (OTCMKTS:ISWH) is an up-and-coming speculative name in the crypto space due to its landmark partnership with Bit5ive LLC, one of the key players in cryptocurrency mining. ISWH partnered with Bit5ive to design and assemble an industry-leading PUE mining pod that works as a self-containing mining solution capable of powering megawatt mining operations in plug-and-play context.

Its first prototype pod has been fully assembled and shipped to Bit5ive’s 100 MW Pennsylvania renewable energy cryptocurrency mining project. The company is also a growing player in the telehealth market, recently announcing strong q/q growth from its home and telehealth healthcare segment.

ISW Holdings Inc (OTCMKTS:ISWH) announced just this morning that the Company and its largest noteholder have reached an agreement whereby 60% of the current convertible debt held by the Company will be exchanged for restricted preferred equity, eliminating the majority of dilution potential from convertible debentures now carried in the Company’s books.

According to the release, the Company and its largest noteholder have agreed to exchange convertible debentures with an aggregate value of $800K for restricted Preferred B equity, thereby reducing total debt and significantly curtailing dilution potential over coming months. Management notes that the Agreement forms the basic template the Company will use in future financing rounds to prevent dilution risk from re-emerging.

“This is exactly what we wanted on behalf of our common shareholder base to demonstrate our commitment to our new anti-dilution agenda,” commented Alonzo Pierce, President and Chairman of ISW Holdings. “We recently announced that our crypto mining pod solution has been shipped to Pennsylvania to participate in Bit5ive’s 100MW crypto mining project. We also recently announced that we were canceling nearly 25% of our outstanding shares. This follows new record revenue gains in Q3 from our Home and Telehealth Healthcare segment, with over $769K in revenues in the first nine months of this year, growing at over 140%. Now, we are eliminating dilution risk proactively in collaboration with our funders and driving major improvements in the balance sheet.”

The context for this announcement is a bit of a bid, with shares acting well over the past five days, up about 37% in that timeframe.

ISW Holdings Ord Shs (OTCMKTS:ISWH) has demonstrated rapid topline growth in its home healthcare operations with six consecutive quarters of sharp sequential growth. Its most recent quarter put the company on an annual run-rate to pull in more than $1.5 million in revenues not counting what appears to be significant growth brewing in its Proceso cryptocurrency mining and mining equipment segment over coming months.

 

HIVE Blockchain Technologies Ltd (OTCMKTS:HVBTF) is another name that has been running gangbusters in the space in recent action.

The company trumpets itself as a growth oriented, TSX.V-listed company building a bridge from the blockchain sector to traditional capital markets. HIVE owns state-of-the-art green energy-powered data centre facilities in Canada, Sweden, and Iceland which produce newly minted digital currencies like Bitcoin and Ethereum continuously on the cloud. Its deployments provide shareholders with exposure to the operating margins of digital currency mining as well as a portfolio of crypto coins.

HIVE Blockchain Technologies Ltd (OTCMKTS:HVBTF) recently announced its results for the second quarter ended September 30, 2020. According to its release, revenue from digital currency mining was $13.0 million, an 8% increase from the same quarter last year. Record cash flow of $10.6 million, up significantly from a loss of $4.6 a year earlier. Gross mining margin expanded to $9.2 million, from a loss of more than $560,000 last year. Net income per share grew to $0.03 from a loss of $0.04 during the period ended September 30.

“I’m thrilled to see how well HIVE has done since we settled all disputes with Genesis Mining in June 2019,” comments Frank Holmes, Interim Executive Chairman of HIVE. “We’ve been able to drive down costs, which has led to the highest cash flow in any one quarter since HIVE went public three years ago. This, coupled with higher Ethereum and crypto prices, means that the Company is doing better now than ever before.”

Shares of the stock have powered higher over the past month, rallying roughly 180% in that time on strong overall action.

HIVE Blockchain Technologies Ltd (OTCMKTS:HVBTF) managed to rope in revenues totaling $17.3M in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 9.2%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($22.1M against $12.6M).

Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.

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