The company’s rationale behind entering this industry is that energy is the biggest cost factor for bitcoin mining and therefore it believes that it can mine more efficiently than other miners due to its superior energy management. Since then, the company has ramped up its bitcoin mining operations and is still waiting for the arrival and installation of $126M worth of bitcoin mining equipment to increase the production capacity even more over the next twelve months. In December 2020, CLSK acquired US-based bitcoin miner ATL. For now, this is all you need to know about this segment - later I will explain, why I believe that the new energy segment is close to worthless. In the recent quarter, this segment accounted for 24% of the total revenues. However, until now, the company had big trouble growing this segment and only generated a few million dollars of revenue every quarter while being nowhere close to being profitable. The industry is expected to grow with a CAGR of 12%-28% until 2029 ( source 1, source 2 ). Microgrids got more attention recently due to large-scale power outages in Texas and California. A major user of microgrids is the military, but there are also commercial and residential users, who CleanSpark is now trying to target more and more. This microgrid can be connected to the central electricity network but can also work independently. a battery), and units that can use energy (e.g. a solar panel), units that can store energy (e.g. A microgrid is a decentralized group of units that can produce electricity (e.g. In this segment, the company offers various software solutions (most importantly "mPulse" and "mVSO") for different microgrid applications and it sells related components such as intelligent switches and parallel switchgears. Until the beginning of this year, CleanSpark’s operations only consisted of its new energy business. If you are already familiar with the company, feel free to skip this passage. In order to value the company, we need to understand both segments. Business OverviewĬleanSpark can be separated into two segments, the new energy segment and the bitcoin mining segment. However, CleanSpark ( NASDAQ: CLSK) is a special case and I will do the opposite as I really want to bring more attention to the company’s many red flags.īelow, I will provide a balanced analysis by showing all the risk factors that I have identified and why the bitcoin mining operations seem to be the only hope for the company. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.Usually, in my articles, I will first extensively talk about the investment thesis and then give readers a short overview of the involved risks. When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. By contrast, refuting the claims of Culper Research is something management can do, and it will be interesting to see what else it can do to restore any lost investor confidence in the days to come.ġ0 stocks we like better than CleanSpark, Inc. But the price of bitcoin is something outside of management's control. And this affects CleanSpark because the bulk of its revenue now comes from mining bitcoin. Of course, the short report from Culper Research isn't all that's going on with CleanSpark. The report itself acknowledges Culper's short interest in CleanSpark stock - that's kind of the point of a short report in the first place.ĬleanSpark management said it had a law firm looking into this matter. Management notes that whoever is behind Culper Research stands to profit from CleanSpark stock going down, which is true. Yesterday afternoon, CleanSpark management responded, calling the report "false" and alleging Culper Research is simply a name designed to conceal the true identity of the short seller.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |