Better Bitcoin Stock: Marathon Digital vs. Riot Platforms

• Bitcoin’s price surges over 30% in the past month on hopes of a spot ETF approval and Middle East conflict.
• Marathon Digital (MARA) and Riot Platforms (RIOT) rally about 11% and 14%, respectively, over the last month.
• Marathon and Riot are the two biggest pure-play Bitcoin miners globally.

Company Overview:

Marathon Digital (MARA):

• Market Cap: $6 billion.
• Today’s Change: (-5.72%) -$1.56.
• Current Price: $25.72 (as of February 13, 2024).

Riot Platforms (RIOT):

• Current Price: $15.44.
• Today’s Change: (-3.02%) -$0.48.

Mining Operations:

• Riot Platforms:
  • Deployed 98,694 miners.
  • Hash rate capacity: 10.9 EH/s.
  • Average daily BTC production: 12.1 BTC.
• Marathon Digital:
  • Deployed 155,910 miners.
  • Hash rate capacity: 23.1 EH/s.
  • Average daily BTC production: 41.1 BTC.

Headwinds and Tailwinds:

• Both faced challenges over the summer as Bitcoin prices slumped.
• September saw growth in average daily BTC production as Bitcoin’s price rose.
• Both companies liquidated BTC holdings to raise fresh cash.

Financials (as of Q3 2023):

• Riot Platforms:
  • $289 million in cash.
  • $221 million in BTC.
• Marathon Digital:
  • $114 million in cash.
  • $380 million in BTC.

Analyst Expectations (2023):

• Riot Platforms:
  • Revenue expected to rise 22% to $318 million.
  • Net loss to narrow from $510 million to $169 million.
• Marathon Digital:
  • Revenue expected to surge 210% to $366 million.
  • Net loss to narrow from $687 million to $61 million.

Evaluation:

• Both stocks trade at similar valuations.
• Recommendation: Not bullish on either stock due to the preference for buying Bitcoin directly.
• If forced to choose, the author suggests Marathon Digital due to its larger size, higher daily BTC production, and a clearer path to profitability.

Note: This summary provides an overview of the key points from the article. For detailed investment decisions, readers are encouraged to refer to the full article and conduct further research.