American Bitcoin: A High-Flying Mining Story With A Valuation That's Running Out Of Road

Excerpt

The following is a 250-word excerpt from my full article on Seeking Alpha: A crowdsourced financial market content service where investors can share ideas, discuss news, and make informed investment decisions. Below is a link to the full article:
https://seekingalpha.com/article/4850674-american-bitcoin-a-high-flying-mining-story-with-a-valuation-thats-running-out-of-road

Summary

• American Bitcoin has expanded its hashrate to 25 EH/s and delivered stronger mining output with improving operational efficiency.

• Revenue and adjusted EBITDA rose sharply as upgraded S21+ miners increased uptime and production.

• Despite operational momentum, the company's Bitcoin reserve and cash total far less than its liabilities.

• The stock trades at a large premium to its net asset value, leaving little margin for error.

• Until the company proves it can scale toward 50 EH/s while managing obligations, the risk-reward remains balanced.

Investment Thesis

I assign American Bitcoin Corp. (NASDAQ:ABTC) a hold rating because, although the company has strengthening operational momentum, the stock price is already way ahead of its current net asset value. The fleet upgrade that has pushed the company's hashrate to 25 EH/s, along with its rising Bitcoin output and positive EBITDA, shows a company that is moving in the right direction. Nevertheless, the balance sheet remains burdened by miner purchases and lease obligations and, thus, the company's share price reflects the expectations of future expansion rather than the value of the Bitcoin the company currently holds. So, until the company can prove that it can scale toward its current 50 EH/s target while, at the same time, managing its liabilities, its risk-reward profile remains balanced. Therefore, I recommend for investors to wait for a better entry point or for further execution before taking a stronger stance toward the company…