There’s been a lot of news and almost as much movement with MGT Capital Investments, Inc. (OTCMKTS:MGTI) over the past month. First off, the price has almost tripled from where it sat in May ($0.62 on May 15) to $2.35 where it closed on August 18th. The other news is that MGTI just announced yesterday (August 17) that they have obtained and are in the process of deploying 650 state of the art Bitcoin mining rigs which will be located at a new multi-Megawatt facility in the state of Washington. They have said that the new miners will be fully operational within the next two-weeks.
Bitcoin’s value rested at about $580 at this time last year (August 2016) just a few months after the latest Mt. Gox issues had hit the market. Anyone who follows Bitcoin knows that the cryptocurrency market is really hot and that Bitcoin currently is in the midst of a steady, high-delta year-long growth spurt which has its value near an all-time high of $4510 on Thursday, August 17 2017.
As of Friday, August 18 Bitcoin is still hovering around $4170. This is important for a few reasons: 1) Bitcoin has experienced a strong valuation increase in the past one-month period, which equals its greatest increase since its spike earlier this year between March and June. In July it dived to $1938. 2) The recent split with Bitcoin Cash (called “BCash to avoid confusion) has indirectly caused Bitcoin, with its more established trading infrastructure and global exchange network, to experience increased blockchain activity, trading and value. See, there have been several clonecoins in the past, but BCash also copied the blockchain, meaning that at the time of the fork, every person who owned a Bitcoin also owned a unit of BCash. But there are issues with BCash, not the least of which is its inherent instability and slow blockchain transaction speeds. In addition, 76% of all bitcoin cash that may ever possibly exist, is already in the hands of miners and waiting to be sold. Any time an alternative currency is released, it bolster’s Bitcoin as the de-facto standard crypto, pushing up its price accordingly.
Back to MGTI – Before even announcing their new mining rigs, they surpassed the 1,000 Bitcoins mined milestone – which they have accomplished in less than one year. So we know they’re capable players in this market.
They are also reportedly working on a new suite of cyber security technologies in collaboration with industry visionary John McAfee. They aim to develop and launch a series of protection tools for individuals (mobile) and corporations (WANs). MGTI has one such product undergoing beta testing – Sentinel, an enterprise class network intrusion detector – which they will likely release prior to the end of Q3, 2017.
Also, they have formed a JV with Nordic IT with the goal of bringing to market a new mobile phone platform with strong inherent protections for privacy and hacker-thwarting features. Various statements indicate that they intend for development and marketing for this platform to be complete by February of 2018.
The numbers: MGTI is sitting at a humble $2.35 as of close on August 18. This is down from a high of about $3.40 a year ago, but up from a long-term trough which had them languishing as low as $0.68 and volumes hovering in the low 1M range. Average volume is significantly lower at 728,062 which makes current volume of 1,831,411 all the more impressive. Market cap sits at 91.753M and both PE and EPS are negative at -2.07 and -1.14 respectively.
What does this mean? We’re not sure, but we don’t see another dropoff like last year’s. In fact it would be within reason to think that MGTI can ride the Bitcoin wave long enough to bring their other revenue generating strategies online and surpass their all-time high of $3.19 from August of last year. Definitely keep an eye on these guys – and on the Bitcoin and cryptocurrency news.