SOS Ltd. - Crypto God Born
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Summary
- SOS is a tech company based in China that offers cloud technology, crypto products, and soon crypto mining.
- Yesterday SOS received an initial shipment of 5,000 mining rigs and cleaned up a 24MM warrant overhang at $2.
- Two more shipments are expected mid March mid April, and when these machines are activated it will make SOS one of the largest crytpo miners in the market.
- The Company's core business is profitable generating $50MM top line and EPS+. At current crypto pricing, with all rigs deployed, SOS should add $250K/per day in revenues from mining.
- The stock trades at roughly 2x sales including this boost, with growth expected to hit 300% YoY. With a power cost advantage in China and BTC.X and ETH.X hitting new highs, numbers are going up bigtime in our view. We look for news of the activation of the rigs by Monday, aided by a tailwind of TSLA, MA and now BK - the oldest bank in the USA - getting into crypto to drive the sector. Mining comps MARA RIOT have gone on massive runs and trade at 500% premiums to SOS which is detached from reality. We look for SOS to get a wide following on the Street when these first 5,000 rigs activate by Monday as guided. Against this backdrop, we are initiating coverage of SOS with a STRONG BUY recommendation and price target of $20. More analysis forthcoming.
Analyst's Disclosure: I am/we are long SOS.
We intend to provide additional commentary in our ongoing coverage of SOS.
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