We hold shares in ARB.
Following on from our analysis last month, we have completed a second set of hypothetical calculations to assess the valuation of the business across a number of key metrics – most importantly, BTC price and number of BTC mined per month.
We have taken as our starting points
- An estimated 2.5k of BTC on the BS at the end of the year
- No change to the monthly cash cost
- The Q4 expected run-rate BTC mining capability (between 400 and 500 now, and 200 to 250 from c.May next year (the halvening event))
Initially – we back out the ‘cash’ on the balance sheet at YE
| End of Year BS – BTC value in £k | |
| BTC Price | 2,500 |
| 8500 | 21,250 |
| 9500 | 23,750 |
| 10500 | 26,250 |
| 11500 | 28,750 |
| 12500 | 31,250 |
The business is expected to be very ‘BTC rich’ – assuming it completes no sales to cash between June-19 and YE and mining is as planned.
We then assess Revenue per month and the estimated cash cost of mining (eg the energy)
This provides an estimated EBITDA per month and per-annum.
This provides, on a 4x EV basis, the following assessment of value
In fact, if BTC pricing remains at where it is currently (or increases) we would expect current EV close to zero at YE. Even taking the conservative view post-halvening and at a low BTC price, there is a material amount of upside to go in the share.