MGTI - On the verge of break out higher
Updated
Mark my words, MGTI will see multifold gains in 2018 with $6 in January very likely.
MGTI is the largest U.S. bitcoin miner and they are rapidly expanding their mining operations.
MGTI will have 4700 mining rigs up and running Q1 2018 and generating over 60 Petahash and north of $2 million in monthly revenue - or 1.3MM EBITDA assuming recent prices and mining difficulty.
MGTI was producing about 100 bit coins per month earlier in the year and by Q1 2018 that number will be north of 350 coins per month.
MGTI touched $4.26 on 8/30 as bitcoin made it's first run towards $5000. Based on current BTC the price should be at least $5.
Current price is trading at $2 lower despite bitcoin being $1000 and as high as $1300 higher AND the "YUUGE" increase in mining operations.
Why?
Lots of outdated FUD. Past promises were never delivered, etc. Company funded itself through stock dilution in the past, etc.
Here's the thing though:
I view MGTI as a company that has tried multiple plays over the years and they finally hit gold, bitcoin gold with their mining operations. MGTI is the company that has been "faking it until we make it" but the thing is, by God they're actually making it!!
The blockchain is the future of money and accounting - our entire financial system is going to look dramatically different in 10-15 years. Buying MGTI at this level is like buying AMD when it was $2 a share.
When will MGTI take off?
Timing is always the tricky bit, huh? It could be any day now but I think we'll see a rise to $6 by January. Q2 showed a modest increase in revenue over Q1 but what people seem to forget is they were mining only 100 bit coins in Q2 and in Q1 2018 that number will be 350+ coins.
Unfortunately that means we have to wait 7 months for Q1 2018 earnings but that will be the first quarter with full rig deployment. By then MGTI will be obvious and trading a few fold higher than it is currently.
Based on the wedge coming to a close next week, I think we'll see a gap UP to move closer with BTC's recent price gains.
MGTI is the largest U.S. bitcoin miner and they are rapidly expanding their mining operations.
MGTI will have 4700 mining rigs up and running Q1 2018 and generating over 60 Petahash and north of $2 million in monthly revenue - or 1.3MM EBITDA assuming recent prices and mining difficulty.
MGTI was producing about 100 bit coins per month earlier in the year and by Q1 2018 that number will be north of 350 coins per month.
MGTI touched $4.26 on 8/30 as bitcoin made it's first run towards $5000. Based on current BTC the price should be at least $5.
Current price is trading at $2 lower despite bitcoin being $1000 and as high as $1300 higher AND the "YUUGE" increase in mining operations.
Why?
Lots of outdated FUD. Past promises were never delivered, etc. Company funded itself through stock dilution in the past, etc.
Here's the thing though:
I view MGTI as a company that has tried multiple plays over the years and they finally hit gold, bitcoin gold with their mining operations. MGTI is the company that has been "faking it until we make it" but the thing is, by God they're actually making it!!
The blockchain is the future of money and accounting - our entire financial system is going to look dramatically different in 10-15 years. Buying MGTI at this level is like buying AMD when it was $2 a share.
When will MGTI take off?
Timing is always the tricky bit, huh? It could be any day now but I think we'll see a rise to $6 by January. Q2 showed a modest increase in revenue over Q1 but what people seem to forget is they were mining only 100 bit coins in Q2 and in Q1 2018 that number will be 350+ coins.
Unfortunately that means we have to wait 7 months for Q1 2018 earnings but that will be the first quarter with full rig deployment. By then MGTI will be obvious and trading a few fold higher than it is currently.
Based on the wedge coming to a close next week, I think we'll see a gap UP to move closer with BTC's recent price gains.
Note
An abrupt sell off Monday and this morning (down 9% yesterday; 7% today) has pushed us outside of the wedge. No direct cause/reason for the sell off. No news, PR, etc. Just short sellers and bears in general are controlling the stock price. But that's coming to an end, read below.New support line of $1.92.
This is likely the bottom for the current short term. The previous dip down was to $1.77 on 9/14 before bouncing back to $3.05 on 10/2.
We want to see higher lows and higher highs to confirm the overall bull pattern that began in earnest in May 2017.
If $1.92 holds and bounces higher that's confirmation the overall upward trend remains in tact. So far this morning MGTI is bouncing around $1.92 and $2 on higher volume. (Higher volume Monday too).
The $2 level is a very good point to load up on more shares.
I think we'll see MGTI at $3-4 within the next 30 days and $5-6 by January 2018. Longer term I expect $12-15 by September 2018 but possibly sooner.
What's going on in the next 30 days and January?
Sentinel product ships Nov 1. We're anxiously awaiting pre-sales and sales numbers.
Q3 earnings come out Nov 9th or 15th. (date, TBD).
MGTI will have full deployment of 4700 rigs @ 60 peta hash by Q1 2018. They will mine 350+ bitcoins per month vs the 100 coins per month now.
The bitcoin mining operation is and will continue to drive the stock price higher or lower.
MGTI didn't begin their serious expansion of bitcoin mining until half way through Q3. MGTI deployed 600 rigs in the middle of August. This additional deployment will be net positive but the rigs were only active for half the quarter.
I expect Q3 EPS to still be negative but less negative compared to Q2, which was less negative compared to Q1, etc. MGTI's EPS has been grinding higher for and we'll almost certainly see positive EPS by Q1 2015 and possibly even Q4 2017.
Why? A shipment of 2000 rigs is on the way and anticipated to be delivered by the end of Q4 and up and fully deployed for Q1 2018..
Under full deployment, MGTI have 60+ peta hash and will be mining 350+ bitcoins per month which translates to over 2Million per month. They're also mining ETH and Litecoin.
This latest deployment of 2000 rigs is investor owned but managed by MGTI. Pretty sweet deal for MGTI - they get 50% of the net profits plus 10% of the gross as their management fee. Investors fronted the full cost of the hardware and power. No cost for MGTI, only profit. Why can't I negotiate that kind of deal at work?? :)
Previously, MGTI funded large parts of its operations through share dilution. However, with their mining rigs coming online, this alone will fulfill all of their capital requirements making further/future share dilution unnecessary. Sentinel and the privacy phone aren't even needed to be profitable.
Bears are quick to point out the latest filing where MGTI seeks approval to increase authorized shares but they have done this every year. It is merely to keep an option open in the event of some dire catastrophe. Robert Ladd (CEO) has stated they have no intention of issuing more shares (causing share dilution) and the request for authorization is just to have it as an option if needed.
Bottom line; MGTI is operating in the black and has been the past few months but this isn't yet reflected on publicly available financials.
Strong buy in my view.
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