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Marathon Digital shares dropped 7% after missing Q2 revenue expectations.
An American company called Marathon Digital Holdings is known for crypto mining.
Yesterday, the company posted its income report for the second quarter of 2018. This company’s stock dropped more than 7%. Experts had thought that the company would make a lot more money, but the report showed that it didn’t. This made investors worried.
The profit report says that Marathon made 2,058 Bitcoin (BTC) in the second quarter, which is 30% less than the same time in 2023. This drop in Bitcoin production was a big part of why the business wasn’t making much money. Even worse for Marathon’s finances, it had to sell 51% of the bitcoin it mined during the reporting period to cover its costs. During the quarter, the company lost a huge amount of money nearly $200 million.
Marathon digital faces revenue shortfall amid equipment failures and market challenges
Even though Marathon’s quarterly sales went up by a big 80% to $145.1 million, they didn’t meet experts’ expectations, who were expecting sales of about $158 million. This shortfall means that the company has missed its sales goals for the second quarter in a row. Zacks Investment Research predicted that Marathon would do 15% worse than it did in the previous quarter.
Marathon’s CEO, Fred Thiel, talked about the problems the company was having during the results call. Thiel claimed that a number of factors, including unforeseen machine failures, transmission line repair issues, a higher global hash rate, and the April halving event, were to blame for the low output numbers. When the prize for mining new blocks goes down, it makes it harder to make money. This is why the April halving event is so important in the coin mining business.
Thiel told investors that the company has taken steps to fix these problems and that the problems with the transformers at the Ellendale site were fixed after the end of the quarter. He said, “We continue to target 50 exahash of energized hash rate by the end of 2024, with additional growth in 2025.” Marathon still wants to reach its growth goals, as this showed. This big goal shows that the company still wants to increase the amount of gold it can mine, even though it’s been having some issues lately.
Marathon’s strategic bitcoin accumulation
Marathon announced at the end of July that it had bought $100 million worth of Bitcoin as part of its “HODL strategy” to increase the amount of Bitcoin it owned. With this purchase, Marathon now has more than 20,000 BTC in Bitcoin.
As part of its new strategy, the company said it would keep all Bitcoins it mines in the future and make smart purchases on the open market from time to time. This change demonstrates Marathon’s long-term confidence in the value of Bitcoin and commitment to acquiring it.
Since the company put out its earnings report and its stock price dropped, more people are talking about the problems crypto mining companies have to deal with. Things change quickly in the bitcoin market, and it’s getting harder to mine. It’s not always easy to know the rules. Marathons have a hard time running when things like this happen. Investors will be very interested in how Marathon handles these problems over the next few quarters.
Marathon Digital Holdings still wants Bitcoin to grow and become more valuable, even though some of their first attempts didn’t work. People who have put money into the company will only do so if it can fix its problems and meet its growth goals.
Marathon’s story shows how important it is to be strong and free to change. The company wants to get better at mining bitcoins and getting them. This makes it an important player to keep an eye on in the world of digital asset mining, which is always changing.
