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ISWH in Focus: Upstart for the Next Wave in Crypto (COIN, MSTR, RIOT, MARA, SOS, HVBTF, CAN)

The Coinbase direct listing exposed the vulnerability of the massive run higher in risk bets ahead of the big COIN show. The stock opened for live trading right around the $381 level and took off like a shot. But the supply came in above $420 and put the top in for the day.

And, when COIN shares fell back under the $380 level, the bottom dropped out and the stock didn’t find support until touching $310.

However, its close in the $328 area still gives it a market cap above $85 billion. And the weakness may be attributed to the unique way it got onto the exchange – through direct listing rather than an IPO. The big difference: no restriction to selling shares for people on the inside.

Typically, that helps a new issue because long-time employees, founding share owners, and early-stage shareholders are keen to “exit” with their riches rather than allow the vicissitudes of the open market dictate their financial futures. Most of the time, there are lots of folks with life-changing wealth locked up for a nail-biting couple months post-IPO.

In this case, they were all able to cash in. And that’s just what they did. But that hardly suggests some sort of intel about the company’s future.

In addition, traditional Wall Street institutional investors don’t know how to build valuation projections for 1-3 years out for COIN. They just don’t have the metrics because it implies predicting the price of BTC and ETH, two of the most volatile markets ever to trade. As a result, when COIN shares start to pull back, those players will have a hard time knowing where to set up camp and put in support.

The upshot is some volatility in the crypto world that may define the next few days. But after that process, you want to have your shopping list ready, considering crypto stocks like Coinbase Global Inc (NASDAQ:COIN), MicroStrategy Incorporated (NASDAQ:MSTR), Riot Blockchain Inc (NASDAQ:RIOT), Canaan Inc – ADR (NASDAQ:CAN), HIVE Blockchain Technologies Ltd (OTCMKTS:HVBTF), Sos Ltd – ADR (NYSE:SOS), ISW Holdings (OTCMKTS:ISWH), and Marathon Patent Group Inc (NASDAQ:MARA).

 

Spotlight: ISW Holdings (OTCMKTS:ISWH)

ISW Holdings (OTCMKTS:ISWH) is a real story in the crypto space. There are so many pretenders right now that it’s an important point. This is not a penny stock that just put out one press release saying it plans on making an acquisition in the crypto space.

The company has made a serious investment and now has strong and growing mining capacity and equipment deals in the works, with operations in partnership with Bit5ive in Pennsylvania and a coming footprint in Georgia.

When Bitcoin was still at $10k/coin, ISWH was engaged in a long-term strategy to drive shareholder value in the space with its POD5IVE strategy. Based on publicly available information, the strategy appears to be building toward a best-case result.

The company’s segment subsidiary is Proceso, which produces the POD5IVE mining pod, a fully self-contained high-PUE mining solution designed, assembled, and installed in partnership with Bit5ive at the Bit5ive 100 MW renewable energy cryptocurrency mining facility in Pennsylvania.

It has since tripled its fleet of mining pods. Each pod is powered by 280 mining rigs and is capable of driving roughly $2.9 million in annualized revenues (at current cryptocurrency price levels).

ISW Holdings continues to build out its own mining capacity, with plans to bring multiple additional pods online this year. However, data from pod mining operations is also being collected for the purpose of marketing the POD5IVE datacenter to other businesses and individuals interested in a self-contained industry-leading cryptocurrency mining solution.

 

Looking Back, Looking Ahead

As noted in the company’s release this morning, 2020 turned out to be a year of dramatic transformation for ISW Holdings. The year was marked by several major transitions, all of which form the contextual foundation supporting much bigger expectations in 2021.

According to the release, foremost among these key steps was the critical mid-year formation of the Company’s partnership with Bit5ive, LLC. That step established the Company’s Cryptocurrency Mining and Mining Equipment segment at a time when Bitcoin was trading at approximately $10k. That was followed by aggressive investment in the design, assembly, shipping, and installation of the Company’s first POD5IVE high-PUE mining pod.

The Company’s investment in establishing its TeleCare subsidiary has also turned out to be a key step, laying a foundation for its recent a beneficial restructuring of its relationship with its telehealth and home healthcare joint venture partner, Paradigm Home Health. As recently announced, that new agreement now stands to increase the Company’s share of revenues from related operations by up to 40% in 2021, versus prior years.

The Company also continues to make good on its Anti-Dilution Initiative, which was established in 2020. To date, the Company has reduced outstanding shares by nearly 25%, reduced authorized shares by 88% down to 60 million, and eliminated over $3.4 million (or 94%) of outstanding convertible debt.

As noted in its recent corporate update, the Company anticipates at least threefold growth in topline performance in 2021 versus 2020 as its expanding crypto mining operations fully ramp up.

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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