Integrated Ventures Powers Ahead With Bitcoin Mining
Operations
Bitcoin Miners – Great Way to Play Bitcoin Market With Less
Volatility.
http://psinvestor.com/integrated-ventures-powers-ahead-with-bitcoin-mining-operations/
November 28, 2017 -- InvestorsHub NewsWire -- Integrated
Ventures (INTV)
has reinvented itself as a pure play on bitcoin mining.
Earlier this year INTV set up a wholly owned subsidiary BitcoLab to
focus exclusively on setting up bitcoin mining operations.
Their approach seems to be very measured and thoughtful because
they are starting out small in order to prove the concept out with
a 1000 SF warehouse and then expanding to a 10,000 SF warehouse
with solar panel roof. They have a diversified coin strategy
and are mining Bitcoin, Etherium, and Litecoin. They have
also taken a number of calculated measures to improve the company
structure with only 40 million authorized and a significantly
strengthened the balance sheet it positions them well for future
growth. The company is cash flow positive after the mining
rigs started last week. There is also a hint of a vertical
integration strategy that may lead to other acquisitions. The
company is also breaking new ground as one of 2 publicly traded
bitcoin mining companies.
Core Business : Mining Operation
Bitcoin mining operations seem simple on the surface and most
think you need power and need some mining units. If we
translate this into an analogy its equivalent to gold panning on a
river. It’s not very efficient. Bitcoin mining is far
more complex and you want to select a bitcoin miner that has
streamlined operations and is getting ever last ounce of
productivity out of the operation. Whichever bitcoin miner
has the most powerful machines has an advantage over others.
What this means is that the miner needs to have the latest mining
equipment. Believe it or not by the time the miner gets
delivery of his equipment it’s almost obsolete. A miner need
to find a way to optimize his mining rigs by selling the low
performing ones and replacing them with the most advance models
while optimizing the return on investment. Power is also a
bit factor so getting a renewable source of energy like solar would
reduce the cost of minding. Another factor is the volatility
in the bitcoin market. A good miner will have a trader that
takes advantage of this volatility or hedges the risk. Mining
equipment can break so contingency planning and manning the
downtime is another very important factor in operations.
Another consideration is that miners operate together as part of
mining pools and switching between pools to optimize the yield is
part of the game as well. The cool thing is that you can measure
their efficiency by their yield and the numbers are in real
time.
Does INTV have the secret
sauce?
Focus: Branded Mining Equipment
INTV is taking its mining expertise and also investing in
building a brand name as a manufacturer by launching it is own
brand – Nemesis. The company had launched its own On the
manufacturing side of the business, the company imports all major
components from Taiwan and casings from China and does the final
assembly in the United States. The issue with most mining
units is related to power consumption. Some units switch
themselves off if they get too hot but then they aren’t mining
either. If the units aren’t regulated properly they could
meltdown. Other issues include upgrades of firmware can
sometimes stop the miner from performing. Another huge factor for
buying USA made mining rig is customer and warranty service.
The company’s most advanced and profitable GPU based miner
is Nemesis 8G, now
available for sale from their website (www.bitcolab.io) for $3495.00.
It comes with a 6 month warranty on parts. Most mining units
that come direct from China come with limited manufacturer’s
warranty which is very tough to use. The final assembly is done in
the USA where it is also tested for proper working condition.
In addition, the company also acts as a factory authorized
distributor for BitMain Technologies and InnoSilicon Technology
LTD.
Additional Revenue Streams: Hosting &
Pooling
The company also offers hosting and can switch between Bitcoin,
Litecoin and any other cryptocurrency for private blockchain
mining. Bitcoin Mining is very competitive and the reward
which currently sits at 12.5 Bitcoin per block goes to the first
miner to solve the algorithm. Based in math the miners’
probability of solving for the block is equal to their proportion
of the mining power of the network. By pooling resources the
miners have a better chance of getting the block.
Future Expansion: Vertical
Integration
The newly constructed 10,000 Sg Ft Mining Facility is being
designed for 500 unit Solar Cell installation, valued at
$150,000. No miners have executed on this concept
but Genensis
Mining located in Iceland, is using geothermal
power. Going Solar is just common sense. Electric power is
the largest operational expense, so lowering the cost of energy
will enhance the yield of the bitcoin mining operation. The
concept of the Mobile Mining Center (MMC) is being developed. MMC
is essentially a cargo container that contains mining units racks,
ac, ventilation and power and can be dropped anywhere near a power
supply. These Mobile Mining Centers will allow INTV to form
joint ventures with local businesses by simply dropping MMC’s on
unused portions of real estate withy INTV managing the day to day
operations. Thus, INTV would get a % cut of the mining
operations while building out its own bitcoin mining network in the
process.
Investment Activity: Solid Track
Record
In the summer of 2016, the company had sold its wholly owned
subsidiary called Viva Entertainment Group (OTTV) in exchange for a
$106,000 convertible promissory note, which gave it the right to
convert the stock at a 50% discount to the market price. In
February of 2017, the company was in a position to liquidate this
holding and to build a war chest of cash. The sale of its
OTTV convertible note had generated a net proceeds of $551,800
which was used to launch bitcoin mining operations. In addition,
the company had licensed its EMS Find Platform to EpicMD, LLC for
3% of the gross software revenues.
Valuation Model: Assets & Projections
The company has strong underlying assets. From the latest
quarterly report the cash and marketable securities totaled
$208,094. They also have $281,457 of very liquid mining units
that produce revenue. In the rear future, they have
55,555,555 shares of OTTV common stock that comes off restriction
on January 3, 2018 that has a current market value of
$112,901. In total, these assets add up to $602,452. In
their research and testing facility, according to the company, INTV
has received and installed 50 mining units that produce about
$21/day of bitcoin.
Assuming a slight increase in the price of bitcoin it will throw
off at least $400,000 in revenue in the coming year.
Assuming, they did nothing else that should put them at $1.0 mil in
assets in a year and that’s making the assumption that Bitcoin
doesn’t double or triple in price, like it has done in the past 4
months. There are 8,288,337 shares outstanding out of 40 mil
authorized with a negligible convertible debt amount. The
float is quite tight at 6,959,467. With a current market
capitalization at $.10 of $828,833, this ticker seems to be trading
at a discount to future next year’s cash and represents a very
interesting investment opportunity.
Possible Roll up Strategy
The marketplace for Bitcoin Miners is very fragmented. The
largest names are Antpool, BitFury, KnC Miner HEX Ming then
there are cloud miners like Genesis Mining BitClub Network Bitcoin
Miner Hosting. No significant mining deal purchases but the space
is getting very fragmented which will eventually lead to
consolidation. Pools that work together are awarded with more
bitcoin so this consolidation has to happen and INTV with a public
vehicle could be at the forefront of this movement as smaller
miners look to INTV as the logical choice to grab a larger share of
the hash rate.
Investment
Conclusion
There is no better way to play the price of Bitcoin than with a
pure mining play. Here are some reasons:
BTC is trading over $9,800
The company has almost no debt
Solid balance sheet with $600,000+ in booked and verifiable
assets
Owns 55,555,555 million shares of OTTV, currently valued at 110k
+
Impressive 250k+ cash position
Soon to be cash flow positive
Ready to start booking 1+ mil in annual revenues with estimated
700+k EBIDA.
It should trade in tandem with Bitcoin and alt coin market but
with less volatility akin to the gold stocks versus the price of
gold. Some other stocks in the bitcoin eco system like the
ATM companies and exchanges that feed off the bitcoin eco system
should be less sensitive to the price of bitcoin. Other
stocks that provide services like ICO’s or providers of news win
from acceptance of bitcoin versus dealing with the commodity
itself.
The market has not awakened to this stock and therein lies the
opportunity. The stock trades at a significant discount to
its future cash price. They have an incredible growth vehicle
that includes hosting bitcoin and ties it in with financing.
Their new solar powered mining facility is sure to keep them
profitable in the foreseeable future. The company has shares
available to use their stock as currency to make acquisitions in a
sector ripe with acquisition candidates. The company provides
mining units for sale and could make handsome margins. Then
there is additional investment income that has served them
well. INTV is a bitcoin ecosystem stock that is vertically
integrated from the ground floor up.
“Bitcoin could ‘easily’ reach $40,000 by the end of
2018” - By Michael Novogratz, A Hedge Fund Legend
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