MGT’s market cap is valued at only $103 million. What is this company really worth? By October MGT will be mining approximately 285 bitcoins per month at a rate of 855 bitcoins a quarter. Three years from now MGT will have a minimum of 12,000 bitcoins on the balance sheet. At current pricing of $5,700 per bitcoin the mining business is poised to generate a modest $68 million in revenue over the next three years which is worthy of supporting the current market cap but not too much more. At $10k per bitcoin the balance sheet is projected to increases to $120 million and if McAfee’s prediction of $500,000 per bitcoin comes to fruition then the balance sheet will balloon to $6 billion. If investors in countries like Venezuela, North Korea, South Korea, Japan, Russia, China, etc… continue the trend of losing faith in domestic currency, bitcoin has a real opportunity to thrive over the next three years. On the strength of this bitcoin mining business alone, it’s feasible MGT could soon surge past a $1 billion market cap, or $26/share. If McAfee’s wild prediction comes true, then you’re talking something in excess of $150/share. MGT is in the early stages of positioning for such an outcome. these calculations don't include the 2000 new mining rigs they just bought
Bitcoin is not the only catalyst supporting the share price of MGT. Remember that John McAfee is the innovative visionary of cybersecurity in a world under constant threat to governments, corporations and individuals. His new product, Sentinel, is scheduled to be launched in September. Sentinel ‘monitors network traffic for suspicious activity using sophisticated algorithms and heuristics, generating an alert and deploying appropriate countermeasures when triggered. Sentinel mitigates risk by greatly reducing the time a hacker has to operate inside protected networks, upload malware, or steal data’. McAfee’s prior company produced antivirus software which sold to Intel for $7.6 billion in 2010. What if lightning strikes twice and McAfee has another hit on his hands? If Sentinel evolves into another $7.6 billion product then the share price of MGTI will catapult to $222 a share.
The third angle MGT’s business is McAfee’s plan for the ‘first truly private smartphone’ set to be released in February 2018. Through the use of physical switches that allow the user to disconnect battery, antenna, bluetooth, camera and the microphone McAfee believes it will be the ‘most hack-proof phone’ on the market. If the world of tech truly is headed towards blockchain smart contracts and digital currencies then smartphone security will become even more important in the future. It’s a long shot, but there’s a chance the MGT team could eventually come up with the first decentralized blockchain phone. This is the kind of innovation that could someday knock Apple’s iPhone from its pedestal. Anyone who uses bitcoin with digital wallets can attest to the necessity of smartphone privacy. McAfee’s timing might be right. If this privacy phone can gain any sort of market traction in 2018, 2019, or 2020 then the market cap of MGT will justify a valuation in the tens of billions. A $22 billion market cap would propel MGTI to $555 a share.
Assigning price targets is a fickle aspect of Wall Street industry. Things change too quickly which is why we prefer to utilize momentum points. Nevertheless, if I’m forced to present best case scenario price targets I would go with MGTI $26 on a $1 billion market cap by the end of 2018 because of bitcoin exposure. Then I would assign a best case scenario price target of MGTI $200 on a $7 billion market cap by the end of 2019 because of Sentinel. And finally, MGTI $500 on a $20 billion market cap by the end of 2020 is possible if the privacy smartphone gains traction. These price targets assume John McAfee is a true visionary in cybersecurity and that the quality and timing of his product releases will flourish as blockchain evolves. If McAfee is a second iteration of Steve Jobs then MGTI $500 is exactly what will happen. The cool thing about MGTI is that it’s capable of outperforming in a crisis because of bitcoin exposure but it’s also capable of outperforming in a bull market with successful launches of Sentinel and the privacy phone. Combine these three legs of MGT’s business model and one can intelligently make the case for a multi billion dollar market cap/
$MGTI
