Held back by Bitcoin risking a breakdown below $40,000, Marathon Digital’s (MARA) fortunes reversed with the cryptocurrency rally. Marathon, which reported a seven-fold increase in February bitcoin production, likely bottomed at $20. MARA stock held that level since January. Few market participants expected the breakout that followed. Marathon reported a 729% Y/Y increase in Bitcoin production, to 8,956 BTC. The firm benefited from miners coming online at its new facilities. The company forecasts a has rate at around 13.3 EH/s by the middle of this year. By early 2023, it expects 23.3 EH/s when all its miners are fully deployed.
Risks
Cautious Bitcoin investors may skip the intermediary mining firm by buying the coin instead. Marathon posted revenue of $60.3 million in Q4/2021. But expenses were $49.2 million. Furthermore, in 2021, revenue topped $150.5 million but operating expenses were $204.9 million. Marathon recorded a $156.1 million non-cash stock-based compensation.
Executive compensation is a plague on earnings for technology companies. Marathon’s high executive compensation may weigh on the stock. Although MARA stock benefited from a technical bottom at $20, traders may consider selling the stock. Re-invest the proceeds to cryptocurrencies or Crypto ETFs. This includes Bitcoin Trust (GBTC) and Ethereum Trust (ETHE).
