On December 26, 2023, with MARA Holdings (MARA) at $26.71 per share, NIA sent out an alert saying, "Marathon Digital (MARA) closed Friday at its #1 most overvalued share price in history. When MARA closed at its #2 most overvalued share price in history on July 13, 2023, MARA declined by 59.07%."
MARA closed today at a new 52-week low of $12.42 per share for a decline of 53.50% since NIA's most recent warning!
Although gold mining/exploration stocks went through a severe depression in 2022/2023 and a prolonged bottoming process positioning the highest quality gold companies to 10-20x from their lows in the upcoming months... MARA still has 90%+ downside!
MARA is no longer just a company that mines Bitcoin. MARA has begun getting deeply into debt to buy Bitcoin.
If MARA's mining business has any way of being profitable, why not use the money they raised in convertible debt offerings to mine more Bitcoin? Why are they borrowing billions to buy Bitcoin? Imagine if a gold miner took out billions of dollars in loans not to develop profitable new gold mines, but to buy gold!
The problem with Bitcoin is, if it isn't profitable to mine Bitcoin and companies like MARA go bankrupt... the network disappears, and Bitcoin becomes worthless!
If every gold miner stopped mining gold or if Fort Knox is short on the gold it is supposed to have stored... gold would immediately go to $10,000+ per oz.
Gold doesn't need to be mined to have value! Bitcoin must continuously be mined to be worth anything, and right now... it isn't possible to mine Bitcoin profitability!
The best thing MARA has going for it is the huge volume it consistently trades. In the first nine months of 2024, MARA issued 34,785,661 shares in at-the-money stock offerings raising $665.7 million to pay for their money losing mining operations. As MARA declines in price, these ATM offerings become much more dilutive... with risk of a death spiral to below $1! MARA is better off not mining Bitcoin, which is why it borrowed $2 billion in recent convertible debt offerings to buy Bitcoin (under the guidance of Michael Saylor).
MARA recently bragged that it achieved a 2024 BTC yield per share of 62.7%, which basically means they got into debt to buy Bitcoin (this isn't yield). How is MARA and Michael Saylor's MicroStrategy (MSTR) allowed to get away with misleading investors with this BTC yield BS?!?!?
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is meant for informational and educational purposes only and does not provide investment advice.
Preparing Americans for Hyperinflation
