MGT Capital Investments Inc.
MGT Capital Investments Inc. (OTCMKTS:MGTI) shares fell 9.17% as bitcoin came under pressure after rising above the $6000 mark. Investor confidence on the stock has also taken a hit on the company raising concerns that unforeseen issues could affect the deployment of mining rigs. The company has also warned that there cannot be any assurances that historical correlation of difficulty rates and bitcoin prices will hold going forward.
Bitcoin Mining Revenue Estimates
The sentiments appear to have spooked investors as seen by the stock dropping from these year’s highs of $4.26 a share, to current trading levels. While the stock is still trading in an uptrend for the year, it has shed more than 40% in market value since August.
MGT Capital Investments Inc. (OTCMKTS:MGTI) is aggressively ramping up its bitcoin mining operations as it looks to take advantage of the growing popularity of digital currencies. The company’s mining operations are expected to generate over $2 million in monthly revenue should bitcoin prices continue to rise.
The company’s big plan is to deploy all its 4,700 Bitmain Technologies S9 Antimer rigs, which could see it generate annualized revenue of $25 million leading to an EBITDA of $13 million. The company has already paid for all its mining machines with the exception of $4.6 million in total debt.
“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,” said Stephen Schaeffer
Taking into consideration the price and resiliency of Bitcoin, MGT Capital Investments Inc. (OTCMKTS:MGTI) remains well positioned to select partners to accelerate the next phase of growth. The company has already inked agreements for the financing of hardware costs further underscoring its growing credibility in the industry.
Sentinel System Launch
In addition to pursing growth around Cryptocurrencies, MGT Capital Investments Inc. (OTCMKTS:MGTI) is also strengthening its prospects in the network security business. The company has launched Sentinel, a network intrusion detection system that uses sophisticated algorithms to generate an alert and deploy countermeasures whenever triggered. The system comprises of a passive hardware device that is connected to each subnet.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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