Is Marathon Digital Holdings MARA a good stock to buy?
Hi, this is Jeffrey Cohen, Chicago Quantum. We’re going to talk about Marathon Digital Holdings. I was looking at the stock today and I noticed a whole bunch of things out of the SEC filings that give me pause and give me reservations. I am going to do this video to AC/DC Thunderstruck. Let’s see if I can finish by the time the video is over.
The first thing I notice is that Marathon Digital Holdings has woke and it is going to be carbon neutral. They added a Douglas Mellinger to the Board of Directors (never heard of him). I guess they are all right. Nice new board member, got to pay them. Marathon Digital Holdings, they terminated their agreement for a new data center in Montana 110 megawatts. So the problem you have here is we want to use renewable energy but where are they going to put the miners (on order)? Costs are going to go through the roof. This is a coal burning plant. They’ve been working with them since 2020 to get this done. I think OH NO, Hash Rate’s going to drop, fall behind. Let’s take a look at the annual report
2021 10K looks nice. Before the annual report came out they had what’s called a form 12b-25 notification. Late filing. This is not normal. Company encountered a delay in the accounting firm’s completion of its audit. That’s never a good sign with the accounting firm. I find a prospectus but they’re not selling the stock themselves. Somebody else is selling the stock. As I walk through all of the history of the company what I realize is $SI Silvergate, they are a bitcoin lender. They MARA borrowed a $100 million dollar revolving term loan, $100 million, this is in October 2020. They started working in Hardin, montana for the new data center and gave away a ton of shares. In November of 2021 they issued convertible senior notes due in 2026. $650 million dollars. Interest rates is low but you’re still gonna either roll it or pay it off.
I see another $100 million ($97.5 million) convertible senior notes to Jeffries. They agreed to pay four point four cents ($0.044) a kilowatt hour to Compute North. Maybe that’s okay, maybe not.
Merrick Okamoto left as Executive Chairman. They gave him a bunch of shares. They reached an agreement to spend about $900 million dollars on new servers.
Then there’s the at the money (ATM program) that got me. Here we go. February they have a $750 million dollar at the money agreement for HC Wainwright to sell a whole bunch of shares whenever the stock goes up. I think “Oh, we’re in big trouble here.” Let’s look at the stock and how it’s trading. Full screen
I know this is up and down, up and down. Let’s look for two years. This thing popped, popped, and popped again. Now it’s at $23. A very high beta stock. Money losing company. They lose money, they have a ton of debt.
I’m not sure. I’m starting to feel like maybe the stock isn’t gonna make it. Let’s take a look at that 10-K we pulled up.
There’s a lot of stuff (fluff) here.
Mara, did you make any money?
Did you make any cash? All right, assets, total current assets $688 million.
Current liability $750 million. I don’t know. Buyer Beware folks, Buyer Beware.
Here is the original YouTube video.