Not investment advice. Our perspective. Do your own research:
In RIOT’s latest Q2 Earnings Report, they listed $1.4B in total assets broken down by line item. Two of those lines refer to miners:
- Property and equipment, net: $411,244,000
- Deposits: $363,010,000
Of the property/equipment, they break it out further in Note 8 as:
- Buildings and building improvements: $154,960,000
- Miners and Mining equipment: $193,486,000
- Construction in progress: $93,375,000
They also tell us how many miners these are in the earnings:
During the six months ended June 30, 2022, the Company had deployed a total of 44,720 miners in its mining operation.
The deposits line is all miner deposits:
As of June 30, 2022, the Company had outstanding executed purchase agreements for the purchase of miners from Bitmain for a total of approximately 26,361 new model S19j Pro miners and 30,000 new model S19XP miners. … the Company paid a deposit of 68% of the total purchase price.
RIOT still owes $110.6M on this order.
Valuing 44,720 miners at $193,486,000 is $4,236 per S19j Pro miner. The problem there is that these miners are not worth that much any more. Here’s one which ships free in 48h from the US for $2,490.
It’s not even clear there is market demand at $2,490, but just discounting the miners to market price would be an $81M loss on RIOT’s balance sheet. And RIOT’s miners are used. These are brand-new prices.
As an idea of what a fire sale looks like, Bitfarms just sold some S9 miners off their balance sheet for only $25 per miner.
What about the miner deposits?
S19XPs are more valuable, here’s a new one for $4,999
- 26,361 S19j Pros, using $2,490 price, is $65.6M.
- 30,000 S19XP, using $4,999 price, is $150M.
- Still owe $110M
So, that $363M in deposits on the balance sheet will result in a $258M loss.
RIOT can’t sell these machines for the prices in their balance sheet. They paid way more than they are worth, and are looking at a write down which will be another big quarterly loss. Whether they actually write them down in this quarter or later is unclear, but it will hit at some point.
Buying RIOT’s stock is akin to paying today $4,236 to buy a used miner that is being sold new for $2,500. RIOT spent 2-3x on the miners than what they are worth right now and they haven’t even plugged many of them in yet.
Behind the Videos, Marketing & Hype – Whinstone, Chad Everett Harris, Riot, and Northern Data
Find the Northern Data — A Shady Bitcoin Mining Host, camouflaging under High Performance Computing/Artificial Intelligence Story article posted here.
Chad Everett Harris, Whinstone US, RIOT Blockchain, sued for $50MM, click here.
Chad Everett Harris, Whinstone, Riot Blockchain, Northern Data AG accused of accounting fraud Read that article here.
Chad Harris defaults on million dollar loan, click here to learn more. Be sure to read the court doc. It’s a hoot, He tries to play the victim. The judge ain’t buying it.
Chad Everett Harris owned this business while defaulting on loans and invoices. Click here to learn more.
Chad Everett Harris is a porn spammer? We believe he did that while sending email like these to the people he owed money to