For The 2020 Hardin Data Center Agreement, Marathon Received an SEC Subpoena; Shares Dropped
As of this writing, the bitcoin miner's stock had fallen 27%, which was a far cry from its peers.
On Monday, Marathon Digital Holdings (MARA) disclosed that it had received an SEC subpoena requiring the company's executives to produce records related to the company's Hardin, Montana data center facility.
Marathon Digital Holdings is under investigation by the Securities and Exchange Commission (SEC) for possible violations of federal securities laws.
While Marathon Digital Holdings did not identify the possible violations, they stated that they were cooperating with authorities.
When the bitcoin miner entered into a series of agreements with multiple parties on Oct. 6, 2020, to design and build a data center capable of generating up to 100 megawatts, it issued 6 million restricted Marathon common shares as part of the deal.
For the Hardin data center, Marathon Digital Holdings announced last October a partnership with Beowulf Energy in which Beowulf becomes an equity shareholder of Marathon as well.
A 27% drop in Marathon Digital Holdings' stock price came on Monday, putting the company way behind its crypto mining competitors. After 24 hours, the price of bitcoin had dropped about 0.5 percent.
The bitcoin miner announced earlier on Monday that it plans to raise $500 million in senior convertible notes to buy more bitcoin and bitcoin miners.
One of the world's leading digital asset technology companies, Marathon mines cryptocurrency and focuses on Blockchain development.
Marathon Patent Group was founded in 2010 when it began acquiring patents on encryption. In 2013, MARA stock went on the market. Marathon Digital Holdings became the company's new name on March 1. When Merrick Okamoto stepped down on April 26, Fred Thiel was named CEO. This will be Okamoto's final year as chairman, the company announced on December 15th. He will assume the position of chairman on January 1, 2022.
The computing power required to mine Bitcoins is provided by Marathon Digital. Bitcoin mining is the process of verifying transactions, or "mining" them. For digital currency miners, hash rate refers to how quickly they can process transaction data. Faster transaction processing means more money for the miner.
For mining, Marathon Digital gets paid in Bitcoin. These bitcoins can then be sold to generate revenue for the company in the future. Marathon Digital's operations are also financed through debt.
Marathon Digital Holdings (MARA), a company that mines cryptocurrencies like Bitcoin, has been erratic as the price of the virtual currency fluctuates.
The Mining Power of Marathon Digital Increases
Marathon mined 417.7 bitcoins in October, a 23 percent increase over the previous month's output. According to the bitcoin miner, the total value of the company's bitcoin holdings rose to $457.4 million in the process.
Marathon Digital now has a total of 7,453 bitcoins. There are currently 27,280 active miners on the network.
At the end of the year, Bitmain delivered 42,381 top-tier ASIC mining rigs to Marathon, with an additional 3,285 ASIC rigs still on the way.
Approximately 133,000 operational miners are expected by the middle of 2022, according to the company.
In the first quarter, Rival Riot Blockchain (RIOT) produced 491 BTC. Marathon Digital's gross profit margin in the first quarter was -498.9%, whereas Riot has a gross margin of 67.6%, making Riot the most profitable mining company in the industry.
Installation base grows
Machine installations will increase in tandem with Marathon Digital's expansion plans. By the end of the year, it expects to have 75,000 miners on hand, with an additional 15,200 arriving in January 2022. By the first quarter of 2022, Marathon Digital expects to have 103,120 miners. It expects to produce 55-60 Bitcoin per day with this mining capacity.
According to Dede, Marathon's average cost per mining machine is $2,300, a far cry from the $7,999-$18,500 he's seen other companies pay.
About 73,000 of its Bitcoin miners will be housed in a new 300-megawatt Texas data center that Marathon Digital signed a deal with Compute North for earlier this month. To build the facility, Marathon will lend Compute North a bridge loan of up to 67 million dollars over 18 months.
Technical Analysis of the MARA Stock
In early April, Marathon Digital formed a bearish head-and-shoulders pattern. There hasn't been any new pattern formed since the stock went downhill from there.
MARA shares have been on a roller coaster ride because they are closely linked to Bitcoin prices. MARA stock was trading at around 10 at the beginning of the year. With Bitcoin's rise, the stock hit an all-time high on April 6 of 57.75.
As Bitcoin's price reclaimed $39,000 on July 26, the stock market's value rose by 15%. However, on July 27, that gain was largely erased. According to MarketSmith chart analysis, MARA stock is currently trading below its 50-day line.
A 5.5 percent drop in Bitcoin's value to below $33,000 on June 21 was blamed on China's escalating crackdown on the cryptocurrency's mining industry. All cryptocurrency transactions in China were halted on September 24. A $2000 drop-in Bitcoin's value was caused by the move.
On the other hand, the Biden administration announced on July 15 that it had formed a task force to combat the use of cryptocurrency in ransomware. Tracing monies paid to hackers will be a major focus of this effort.
A new high was set on Oct. 20 when a Bitcoin futures ETF was launched and others were expected to follow.
As the price of Bitcoin increased by 5.5% to $65,733 in the previous 24 hours, MARA's stock soared 19% to an all-time high of 75.96 on Nov. 8. However, since the beginning of November, Bitcoin prices have fallen by a quarter.
The relative strength line of MARA stock fell sharply on Nov. 15 following the stock's 27% decline. With an RS Rating of 97 out of 99 points, Marathon Digital earns a Composite Rating of 56 points.
The accumulation/distribution level of B shows that the purchase volume of institutional investors is moderate.