Today, investors in Marathon Digital (NASDAQ:MARA) stock are seeing another impressive decline. From peak to trough yesterday, MARA declined more than 10% on an update from the company’s Montana-based Bitcoin (BTC-USD) mining operations. Now shares are down another 10% as investors continue to digest the news.
This update highlighted the effects of a storm that passed through Hardin, Montana earlier this month. Basically, Marathon has halted mining operations as the result of no power. Operations will also likely remain offline for some time. Notably, the company has approximately 30,000 miners in the state, accounting for roughly 75% of the company’s “active fleet.”
For investors looking at Marathon’s cash flow prospects, this is obviously a huge hit. Let’s dive into what MARA stock investors should make of the news right now.
MARA Stock Sinks Again as Investors Digest Recent News
There’s not much in the way of positives investors can take away from this update. Indeed, Marathon’s entire business relies on being up and running 24/7. Accordingly, this shutdown has hurt investor confidence in a big way.
That said, Marathon Digital expects to come back online as early as next week. Additionally, the company had planned to shift production to “more sustainable sources of power” over time. So, perhaps this storm will simply accelerate that process.
Still, with Bitcoin hovering around $20,000 today, mining is already at significantly less profitable levels. Where the company’s breakeven is depends on many factors, including the global hash rate. But at these prices, it’s clear profitability is already a chief concern among investors. Should lower BTC prices persist, storms may be the headwind MARA stock investors are least interested in.
Overall, it’s looking like a tough market for investors in crypto miners. And it’s hard to say whether these declines are temporary. Anything can happen, but we’re in the middle of a rather aggressive bear market for crypto right now.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
On the date of publication, Chris MacDonald did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.