Congrats BotTrigger Members. We’re going to cover 2 main subjects here: $OSTK & $MGTI (below) Strongest Winners $BIDU now up 42% since entry $BA now up 72% since entry $ALB now up 22% since entry $AAPL stock replacement strategy up 13% since entry $LNTH up +70% since entry $MGTI up +70% since buy alert 1 & +50% net avg on all 5 buy alerts $OSTK up 40% since entry Today’s big leader in the room is $OSTK up 15% just today breaking out above it’s consolidation zone on near record volume for the week, now up around $35. That it’s only Tuesday and we’re seeing the volume come in this strong suggests that there is more upside to our Overstock thesis. This breakout is happening with authority & we still have bullish confluence on several key momentum oscillators showing that the upside runway has more to go on the intermediate & primary term trend from here. Overstock is on schedule to clear the mid $30’s. As result of today’s breakout, our March option calls are now about 40% higher from our purchase entry. What we have here on Overstock is a very bullish MACRO pattern formation known as a Cup & Handle. When these occur on the macro big picture trends, they are statistically very bullish. This pattern is showing you that over years of trading data, that there is a clear shift in sentiment in regards to how Overstock is being traded. However, don’t be spooked to see $OSTK pullback & do a little back-&-fill here. A pullback from here retesting the $30s area would cultivate the “handle” part of this giant cup & handle formation. A retest of the $30’s that shows a strong bounce from there would be net bullish. In fact that would be ultra bullish and our signal for adding more allocation to OSTK. Moving on to $MGTI, we can’t stress enough that bullish backdrop on MGT capital only has more upside from here. Even though MGT is largely underperforming relative to Bitcoin’s recent surge in price appreciation, the market will inevitably correct this underperformance. Their latest news of doubling output will bode extremely well for us.
Great update in yesterday morning’s MGT press release. Since issuing its last update at the end of August, MGT has doubled its pace of annual bitcoin mining revenue from $12 million to $25 million. Stephen Schaeffer is moving at warp speed. Profit margins are also improving as the price of bitcoin appreciates to its current level at $5,700. We expect this positive momentum to continue as additional partnerships are announced. Institutions wanting exposure to bitcoin mining will turn to MGT. Read the full press release below:
“We have been running at breakneck speed to achieve a substantial expansion of our Bitcoin mining footprint, and it’s time for a comprehensive summary,” stated Stephen Schaeffer, President of the Company’s Crypto-Capital Strategies business unit.
Following shipment and setup, and in conjunction with the Company’s current rigs in operation and on firm order, MGT’s Bitcoin mining operations are expected to generate over $2.0 million in monthly revenue, assuming recent pricing and difficulty rates. Factoring in management fees, profit sharing, electricity, hosting and other direct operating costs, EBITDA from the Company’s Bitcoin mining operations is projected at $1.1 million per month. The Company expects all rigs announced to date to be operating during the first quarter of 2018. Upon full deployment, the total number of mining machines will consist of approximately 4,700 Bitmain Technologies S9 Antimer rigs, generating potential hash power in excess of 60 Ph/s, solidifying MGT’s claim of being the largest Bitcoin miner in the U.S. Projected annualized revenue of $25 million and EBITDA of $13 million will far exceed ongoing corporate capital requirements. All mining machines referred to in this press release are fully paid, with the exception of $4.6 million in total debt, all in the form of secured notes convertible into MGT common stock. No further capital is required from MGT or third-party investors in order to receive delivery from firm purchase orders with Bitmain. The Company has also acquired 50 graphics processor-based mining computers to mine Ethereum and Ethereum Classic.
Mr. Schaeffer continued, “The effort required to reach our current level is not trivial. The ability to scale our operations requires coordinating the procurement of supply-constrained rigs, massive power requirements, substantial monitoring and controls, and the like. This success is far from a plug and play endeavor. We are very proud of the diligence of the entire MGT team.
Concluded Mr. Schaeffer, “The newly announced vertical of rig management, combined with the expected abundant free cash flow, positions the Company for even greater growth during 2018.”
The price and resiliency of Bitcoin, along with the growing recognition of MGT’s expertise, now puts the Company in the enviable position of being very selective in choosing partners to help it grow. Last week’s announcement of agreements to fund hardware costs illustrates this favorable dynamic. The agreements provide for third party investors to fund the entire upfront costs of mining rigs and power, in return for fifty percent of the net profits. In addition to its fifty percent share of net profits, MGT receives ten percent of gross revenues as a management fee. Investors also received about 350,000 shares of restricted MGT common stock and 350,000 warrants to acquire stock at an exercise price of $2.00 per share.
The latest news of MGT doubling their mining output will be corrected to the upside once the market realizes the residual impact that this will have on their influence in the market place. They own the lion share of their own machines and are now positioning themselves as the go-to de facto for other companies who want to get involved in mining cryptocurrencies. So here is the gist of why we’ve seen lethargic behavior with MGTI....in short: the market wants to see them own there own mining machines. Just give this time once all of this work MGT has labored starts translating into their revenue figures. Institutions already know this and that’s why we’ve seen Institutional ownership grown from 6% last quarter to now 16% this quarter. We’ll get the data on institutional ownership some time in November. My bet is that we’ll watch IO reach above 20% by then.