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Monday, September 06, 2021 10:59:52 PM
Let's break this down. HUT is 10x their current carry of 9.5 BTC (From their pr: "Despite recent upward network difficulty adjustments, we continue to mine approximately 9-10 Bitcoin per day".) I had 10 before in my prior breakdown as they had been running at 10.5 before it got harder to mine bitcoin, also from their PR: "326 Bitcoin mined, resulting in average production of 10.5 Bitcoin per day). Current carry ($52k - $3k)*9.5 or $465.5k a day for 365 days is ~ $170 million. Obviously bitcoin is the wild card, as ether is for APLD, and I am using current. You have to use something. So I will use $4k for APLD. Obviously Bitcoin can drop to $20k or clime to $100k, who knows, actually the longs do.... Keep in mind, these guys are ahead of $APLD in age, operations, etc.
$APLD breakdown. Since I answered the price question, do I use base case for ETH production a day at 9,200 or 12,000. I think since HUT is older, established, etc. and since I don't have any HUT growth assumptions in the #s above, I should use 12,000 to catch APLD up a little bit but can't as i'm not sure how to make the numbers work. I know I can use ratios but I like to know what the ratios are for exactly so they are not misleading... In reality, I am comparing HUT's 2021 numbers to APLD's projected 2022 numbers, who knows.
We know HUT will dilute to grow. They are dumb if they don't. As a shareholder, that is great dilution. "Excuse me, if I borrow some more dollars and I dilute you a little bit, I will be able to increase your return by an exponential amount. Would you like that sir?" HHHmmmm. They should!!! They are printing money!!! Oh yea, in the fine print for APLD, the forecasted P&L has a $60mm raise. Screw it, let's not haircut that and assume it comes to fruition. But does that $60mm include some of the PP money they already knew they were getting???....I would thinks so and can't see how not...
Drum roll:
$141,254,000/$1,500 = 94k ether a year at $1,500 price or 258 coins a day. So our cost of mining should remain the same but we need to bring the ethereum price to $4,000. So $4,000*$94k or $376 million minus $56 million for cost of mining or $320 million compared to Huts $170mm or 1.9. Since Hut is our base at a market cap of $1.6 bn, that puts APLD at $3.00 bn market cap. So at 500 million shares that puts APLD at $6 a share. Yoowwwwzzzzerrrr. Are my numbers right? Also, I know HUT is planning on growing next year and I am extrapolating using August's numbers which assumes zero growth. I know some will say it is already in the market cap but that isn't how I did my back of the envelope analysis.
With that said, it for sure looks a hell of a lot better mining ether and I am long ether as much as bitcoin currently but will not be in the long run as ether will continue to grow at a faster pace that its big brother bitcoin. Bitcoin will always hold the prestige though....
I am tired as crap so I am not proofreading my numbers as I could have made some horrible mistakes. I don't care at all if it is beaten up as I think boards should be constructive and see some commonality in value after all the pros and cons are aired out....
Everything I say is my educated opinion and is NOT investment advice
Recent APLD News
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