In the Q1 report, RIOT had $113M in cash as of March 31, 2022 and spent a net of $198M cash over those 3 months ($66M / month). Now, 4 months later, what might we estimate has happened since:
- Another -$264M spent (continuing the $66M / month).
- +$140M raised in April selling shares
- +$10M from April 250 BTC sales
- +$7.5M from May 300 BTC sales
- +$6.2M from June 300 BTC sales
- +$6.3M plus or minus if they sold another 300 BTC in July
That math is $113M – $264M + $140M + $10M + $7.5M + $6.2M +$6.3M = $19M
If that’s the case, then they are days away from running out of cash. I seriously doubt that though. There are other possibilities:
- They may have lowered spending significantly. Possible ranges here are hard to guess.
- They may have ramped up BTC sales. For example, they could have added around $150M by selling their entire BTC hoard.
- They may have still sold more shares. The amount left is limited and the price hasn’t been very high, but this could have added maybe as much as $200M.
- Debt issuance.
- They may have sold some miners. I feel this is unlikely.
I suspect we’ll see some of the first two of these in the July production report: Increased BTC sales and decreased BTC mining due to spending cuts. I’d not be surprised if they sold more BTC than they mined for the first time.
Debt seems likely to follow next. If so, it’s interesting to learn what the terms might be. As a potential comparable, MSTR sold debt in early June at 6.125%. Available interest rates are probably already higher than that by now.
MSTR also has around 130k BTC vs. RIOT’s 7k BTC. RIOT’s “current assets” in Q1 were $439M, but from the above, they probably have spent around $264M of that between cash and BTC sales and lost another ~$75M in just price decrease for BTC (at the time of the 10-Q, BTC was at $45k). Add the $140M raised and that’s only about $240M. The rest of the assets are more difficult to liquidate: mostly miners and a large “goodwill” line item. I don’t know how much debt they can find buyers for with that.
BASED ON OUR EXPERIENCES – DO NOT TRUST CHAD EVERETT HARRIS OR ANYTHING HE’S INVOLVED WITH!
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.