MGT Capital Investments Inc. (OTCMKTS:MGTI) is in the grips of an upward “jolt” as we move past the Thanksgiving break and head inexorably into the year-end sprint. The stock ripped over 35% higher during the shortened session on Friday, along with some other peers. It was a bitcoin group thing. Why did we see this sudden pop?
We think it has mostly to do with the news that former Fortress Investment head Mike Novogratz has had an easy time raising a half of a billion dollars to start a cryptocurrency hedge fund. We recently put out a piece on Bitcoin futures, noting that the existence of the futures market here would enable hedging, which would, in turn, enable the participation of bigger money. We are seeing this pop in interest precisely because we are starting to see signs that this idea was exactly correct. Mr. Novogratz is likely one of the first of many more.
MGT Capital Investments Inc. (OTCMKTS:MGTI) is in the process of acquiring a diverse portfolio of cybersecurity technologies and ramping up its Bitcoin mining operations in the state of Washington.
In short, MGTI focuses on acquiring and developing a portfolio of cybersecurity technologies. It intends to address various cyber threats through protection technologies for mobile and personal tech devices, as well as corporate networks.
MGTI also engages in bitcoin mining operation and recently ramped up its Ethereum mining operations as well. MGT Capital Investments, Inc. was founded in 1979 and is headquartered in Durham, North Carolina.
According to MGTI: “With facilities in WA state, MGT Capital Investments, Inc. (MGTI) ranks as one of the largest U.S. based Bitcoin miners. Further, the Company continues to focus on an expansion model to grow its crypto assets materially. The Company is also developing a portfolio of cybersecurity technologies, with industry pioneer John McAfee as its visionary leader, creating advanced protection technologies for mobile and personal tech devices, as well as corporate networks. The Company’s first product, Sentinel, an enterprise class network intrusion detector, is currently in beta testing, with commercial released anticipated by the end of September 2017. The Company also has entered into a joint venture with Nordic IT to develop and market a mobile phone with extensive privacy and anti-hacking features. The Privacy Phone has a tentative release date of February 2018.”
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As noted above, we believe this stock caught a major bid on Friday because it was reacting to news of a kind of institutional Wall Street validation of the Bitcoin market. Remember, MGTI has been moving steadily into the Bitcoin mining game over the past year, beefing up its in-house mining resources considerably in recent months.
The idea that a half billion bucks of new buying power just came on the radar in the hands of a fund manager who is outwardly bullish on the idea is big. But the idea that this might be just the first in a wave rolling into the space is much, much bigger.
“We’re in the second or third inning,” said Mr. Novogratz. “Because prices have moved so far people are nervous. You made a whole lot of money, there’s news, so you want to book your profit and get out.”
Traders will note 34% added to share values of the listing over the past week of action. Market participants may want to pay attention to this stock. MGTI has evidenced sudden upward volatility on many prior occasions. Moreover, the name has seen interest climb, with an increase in recent trading volume of 12% beyond its prior sustained average level.
At this time, carrying a capital value in the market of $108.5M, MGTI has virtually no cash on the books, which must be weighed relative to virtually no total current liabilities. MGTI is pulling in trailing 12-month revenues of $1.5M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 871.7%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. Sign-up for continuing coverage on shares of $MGTI stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $MGTI, either long or short, and we have not been compensated for this article.