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RIOT

|Includes: MARA, Riot Blockchain, Inc. (RIOT)
Summary

Was a biotech 6 weeks ago.

Management are not bitcoin/blockchain experts.

Limited Assets.

I am advising that investors run from Riot (and many other names in this space).  These are not real companies but otherwise failing companies that have rebranded as blockchain/bitcoin companies in order to fool novice investors.

A decade ago.  I bought some fraudulent commodity stocks similar to these names.  All went to zero.  I came across article hyping the prospects of some new silver, palladium mine, etc.

A quick look over riot balance sheet tells you they have $2 per share or so of cash.  They have a few bitcoin investments.  Buying roughly $3 million worth mining equipment.  A few VC style bitcoin firm investments of a few million dollars. 

Unless you believe 5-10 million in investments a few weeks ago are now worth 20 times the investment price then run from these guys.

I know traders making money in this space.  But if you are a dentist.  Confused with the bitcoin paradim and looking for exposure then the public market place isn't likely to be a good place to find investments.  You are far better off finding a bitcoin exchange and buying the coins directly where you will get a much better price.  The best bitcoin etfs are offering you pricing 50-100% above the price of actual bitcoins.  And the worst priced publically traded bitcoin stocks are trading at 20 times the value of investments these firms made in the last month.  As far as I can tell RIOT hasn't even started mining yet.

I have a friend who set up a similar mining operation.  It is a profitable investment.  But has limited ability to reinvest in mining long-term as the costs of mining eventually catches up with the price of bitcoin whenever bitcoin isn't tripling in a few weeks. 

Disclosure: I am/we are short RIOT.

Additional disclosure: Short RIOT. Active trader position can quickly change.