Marathon Digital (MARA) Expenses To Watch For Capacity Expansions

I am holding onto my position in MARA as I believe that its strategy to boost up its mining capacity when Bitcoin is making correction on its price, now MARA is set to reap the benefit as the sales would help to offset any expenses spend on mining.

Bitcoin is above $85,000 at time of writing. Reach $88,0000.

MARA engages in mining cryptocurrencies with a focus on the blockchain ecosystem and generating digital assets. The stock have been up more than 50% since last week’s close on Election Day, it has been on its highest percentage gain since 29 Aug 2023.

Market is expecting MARA to report a loss of 33 cents for the consensus EPS forecast.

MARA reported its Bitcoin activities for October 2024, and the energized hash rate increased 14% to 40.2 EH/s, and MARA has said that it has added about 372 megawatts of owned and operated compute capacity across three sites in Ohio that it intends to fully energize by the end of 2025.

These compute capacity for those sites is "purchased, secured, and ready for deployment." 717 Bitcoin was produced in October, 2% Increase month over month.

On Nov. 5, MARA acquired two data centers in Hannibal and Hopedale, Ohio, that have a combined "222 megawatts of interconnect-approved capacity." The company has also begun developing a 150-megawatt operation in Findlay, Ohio, which already has 30 megawatts of capacity. MARA acquired the assets at a multiple of about $270,000 per megawatt, which he called "one of the lowest disclosed multiples amongst our larger publicly traded peers and demonstrates our unmatched ability to deliver accretive acquisitions."

The transaction fees accounted for 5% of total Bitcoin produced. With Bitcoin cross above $85,000, we should be seeing MARA able to manage their expenses with Bitcoin sales to fund the expenditure.

"Beyond the financial advantages, these data centers contribute to the resilience of MARA's flexible compute portfolio" and increases its exposure to PJM, one of the largest independent system operators, said Chairman and CEO Fred Thiel. "We intend to further expand and diversify our portfolio of owned and operated sites, which we expect to yield significant cost savings."

We are seeing MARA returning more than 6% to investors as Bitcoin continued to rally as during President-elect Trump 2024 campaign, Trump has been a strong advocate for cryptocurrency and pledged to make the U.S. the 'crypto capital of the planet' and the 'Bitcoin superpower of the world.

This should benefit MARA because of its position as the largest Bitcoin miner in the U.S.

We are seeing a potential golden cross formed from the short-term and long-term MA, and this is before the earnings, I would expect MARA to make another new high as Bitcoin continue to move towards $90,000.

MACD is also giving encouraging upside movement signal as MARA continue to trade way above the MA level, MTF does not provide any strong uptrend signal but we are seeing uptrend, so we might want to watch MARA earnings especially on the expenditure on its expansions.

MARA have been expanding its capacity through its acquisitions and greenfield site developments in 2024, they would be the first few to benefit from Bitcoin price rally, this would mean it is more profitable now to mine Bitcoin.

So there is one factor to look out is how MARA would be funding these acquisition and expansion, these should not be any issues as there is better price when MARA sell Bitcoin to fund its operating expenses.

I am expecting MARA to make another high after its earnings result as Bitcoin continued to reach new high.

Appreciate if you could share your thoughts in the comment section whether you think MARA would be able to overcome its expenses challenges with better Bitcoin prices.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.