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Saturday, November 26, 2022

Comeback Time For MGT Capital Investments Inc.(OTCMKTS:MGTI)

MGT Capital Investments Inc.(OTCMKTS:MGTI) has come back some on significant volume off its $0.27 lows caused after the Company’s CEO Robert Ladd was named in an sec investigation. The complaint, filed Sept. 7, accused MGT Capital CEO Robert Ladd and others of inflating stock prices to boost their own wallets.

MGTI has fallen a long way since the highs it saw in December of last year at the height of bitcoins run. Currently bitcoin is trading at $6,400 up a bit after a 1000 point drop 2 weeks ago from mid $7k range.

MGT Capital Investments Inc. (OTCMKTS: MGTI) bills itself as one of the largest U.S. based Bitcoin miners.  MGT owns and operates approximately 6,800 Bitmain S9 miners, and 50 GPU-based Ethereum mining rigs. Further, the Company continues to execute on an expansion model to secure low cost power and grow its crypto assets materially. The Company operates out of facilities in northern Sweden and Washington State.

The Company continues to focus on an expansion model to grow its crypto assets materially. MGTI started off developing a portfolio of cyber security technologies, with industry pioneer John McAfee as its visionary leader, creating advanced protection technologies for mobile and personal tech devices, as well as corporate networks.

MGTI is the brainchild of security whizz John McAfee of McAfee Antivirus who spent years in Belize than on the run and back in the US on top again. Mr. McAfee smartly realized that Bitcoin is the greatest and most disruptive technological advancement to come around in years and he has turned MGTI into one of the largest U.S. based Bitcoin miners. Bitcoin is here to stay and if you don’t own one you could be missing out on one of the greatest investment opportunities of our lifetime.

The Company commenced its Bitcoin mining operations in the Wenatchee Valley area of central Washington in late 2016 however soon realized there was a lack of adequate electric power in Washington to support the Company’s growth so they decided to move its principal mining operations to northern Sweden where there is cheap electricity.

In Sweden the Company entered into a hosting agreement with Beacon Leasing LLC which has not worked out as Beacon Leasing LLC has not lived up to their side of the agreement.

During the first quarter of 2018, the Company took delivery of an additional 2,000 Bitcoin mining machines in Sweden and moved 4,300 machines (including 2,100 investor-owned machines) from Washington to Sweden.

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Earlier this year MGTI entered into a collaborative venture with Bit5ive LLC to design and manufacture a crypto mining pod capable of operating 1MW of mining hardware. The pod will be branded and sold by Bit5ive as POD5, with MGT retaining naming rights for its corporate owned pods. In return for royalty payments from Bit5ive, MGT is providing its engineering and design expertise as well as capital to develop the final production model. Orders are expected to begin in mid-September 2018.

The POD5 will be a fully-assembled containerized turnkey solution with all mounting racks, cabling, power distribution hardware, wiring, and networking included.  In addition, the POD5 will offer a proprietary cooling method allowing for maximum density within the container.  Stephen Schaeffer, Chief Operating Officer of MGT commented, “We believe that the 1-megawatt layout allows for both portability and flexibility to accommodate varying deployments in different locations. We fully intend to utilize the design in the future expansion of our Bitcoin mining operations.”

Last month MGTI reported revenues from bitcoin mining of $409,000 in the second quarter of 2018, ending June 30, 2018 versus $388,000 in same quarter in 2017, and $956,000 in the first quarter of 2018. Revenues derived from the bitcoin production of investor owned machines are not included in our reported figures.  Including these partnerships with investor-owned machines, the company produced 162 Bitcoins in the quarter just ended, compared to 94 Bitcoins the first quarter.

On September 10 MGTI announced Robert Ladd, its President and Chief Executive Officer, is taking a leave of absence to focus on addressing the allegations in an SEC Complaint filed on Friday September 7, 2018. H. Robert Holmes, independent director and Chairman of the Board of Directors of MGT will assume the duties of Mr. Ladd as Interim President and CEO.

Mr. Holmes stated, “Notwithstanding the board’s contention that the SEC claims are without merit, and that Rob will be vindicated, we are faced with the unfortunate immediate situation of perception overwhelming reality. As we previously stated, we wish to further emphasize that the Company was not named as a defendant in the SEC complaint. Further, we can assure stockholders that the operations and activities of the Company will continue under the leadership of Robert Lowrey, Chief Financial Officer and Stephen Schaeffer, Chief Operating Officer, with the full confidence of the board.”

This comes days after Robert Ladd was named in a sec investigation. The complaint, filed Sept. 7, accused MGT Capital CEO Robert Ladd and others of inflating stock prices to boost their own wallets.

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Currently trading at a $23 million market valuation MGTI has $2.3 million in the treasury, debt that includes a #3.8 million note payable and some revenues reporting revenues from bitcoin mining of $409,000 in the second quarter of 2018, ending June 30, 2018 versus $388,000 in same quarter in 2017, and $956,000 in the first quarter of 2018. MGTI is an exciting story developing in small caps; ranking as one of the largest U.S. based Bitcoin miners. There is currently significant demand for MGTI stock which currently trades at half the valuation it commanded just a week ago with no material changes to the Company. We will be updating on MGTI when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with MGTI.

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Disclosure: we hold no position in MGTI either long or short and we have not been compensated for this article.

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