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Wednesday, November 25, 2020

Crypto Spotlight on HIVE Blockchain Technologies Ltd (OTCMKTS:HVBTF)

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HIVE Blockchain Technologies Ltd (OTCMKTS:HVBTF) has been a type-specimen example of the way the larger cryptocurrency ecosystem has been treated by traders and investors over the past couple months. However, this is an interesting play here. With massive top-line growth going right now and building on revs over $10M on a TTM basis. If we see energy return to the crypto space, one might see some fireworks here.

The company just announced that it has applied for listing of an aggregate of 48,830,150 common share purchase warrants on the TSX Venture Exchange as a supplemental listing. According to the release, “the Warrants were issued pursuant to private placements of the Company that closed on November 14, 2017, December 18, 2017, and December 29, 2017.” This would expand the capital structure of the company and create more strategic choices for investors looking to get involved – something that can have a positive impact, but often does not materially change the calculus on a stock.

HIVE Blockchain Technologies Ltd (OTCMKTS:HVBTF) trumpets itself as a company building a bridge from the blockchain sector to traditional capital markets.

HIVE is strategically partnered with Genesis Mining Ltd., the world’s leading cryptocurrency mining hash rate provider, to build the next generation of blockchain infrastructure.

HIVE owns a state-of-the-art GPU-based cryptocurrency mining facility in Iceland, completed in May 2017, which produces mined cryptocurrency like Ethereum around the clock. HIVE has an option to acquire four additional facilities in Iceland or Sweden from Genesis. Genesis supports HIVE with data center infrastructure know-how and is HIVE’s largest shareholder.

According to company materials, “HIVE Blockchain Technologies Ltd. is a growth-oriented, TSX.V-listed company building a bridge from the blockchain sector to traditional capital markets. HIVE is strategically partnered with Genesis Mining Ltd. to build the next generation of blockchain infrastructure. HIVE owns state-of-the-art GPU-based cryptocurrency mining facilities in Iceland, which produce mined cryptocurrency like Ethereum around the clock.”

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As noted above, the stock has been pasted on the downside as the air leaks out relentlessly from the former bubble that is the cryptocurrency space. However, the financials on this one suggest some quality and traders may want to keep it on the radar. We are still dealing with a roughly bullish chart in terms of structure, and the details of its latest cap table maneuver suggest nothing that should pose an obstacle here.

According to the release, “Subject to TSXV approval, the Warrants will commence trading on the TSXV under the symbol “HIVE.WT” concurrently with the expiry of each applicable four month and a day hold period attached to such Warrants. 12,322,250 of the Warrants are expected to be listed on March 15, 2018, 15,873,100 of the Warrants on April 19, 2018 and the remaining 20,634,800 Warrants on April 30, 2018. Each Warrant entitles the holder thereof to acquire one common share of the Company at an exercise price of C$3.90 until November 14, 2019. The Warrants were issued pursuant to, and are governed by, a warrant indenture between the Company and Computershare Trust Company of Canada dated November 14, 2017, as supplemented by the first supplemental warrant indenture dated December 18, 2017.”

We’ve witnessed -6% stripped out of share pricing for the stock in the past week. That said, HVBTF has a track record that includes a number of dramatic bounces, so this may be an opportunity in the making. Furthermore, the stock has witnessed a pop in interest, as transaction volume levels have recently pushed 29% above its longer-run average levels.

Currently trading at a market capitalization of $266M, HVBTF has a significant war chest ($124.1M) of cash on the books, which stands against virtually no total current liabilities. HVBTF is pulling in trailing 12-month revenues of $4.4M. In addition, the company is seeing recent top-line growth, with sequential quarterly revenues growing at 1844.1%. We will update the story again soon as further details emerge. Sign-up for continuing coverage on shares of $HVBTF 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 $HVBTF, either long or short, and we have not been compensated for this article.

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