You may have the big news about the Greenidge Generation (NASDAQ:GREEN), that is, it merged with the technical support specialist Support.com. Of course, it is important for GREE stock holders to consider the ramifications of this potentially groundbreaking deal.
Let’s not focus too much on the Support.com merger, however. Greenidge’s main business is and will likely remain mining cryptocurrencies such as Bitcoin (CCC:BTC-USD).
Additionally, Greenidge Generation is known for addressing a major concern of environmentalists. Specifically, the company strives to mine cryptocurrencies as cleanly as possible.
Certainly Greenidge should be able to generate revenue in the tech support market. At the same time, however, Wall Street should recognize the company’s sizeable treasure trove of powerful crypto mining rigs.
GREE share at a glance
On September 16, the shares of the Greenidge Generation began trading on the stock exchange Nasdaq Stock Exchange. The stock plunged 30% on that first day, hitting the low of $ 40.
Unfortunately, the following months brought no relief to the shareholders. By October, GREE stock had fallen to the middle of $ 20.
It’s a painful lesson for people who get in too quickly during a stock’s hype phase. Often times, it is best to just let the dust fall and then reassess market sentiment before taking a position.
Another important consideration is that GREE stock is likely to be affected by movements in the price of Bitcoin.
So, if you’re not into Bitcoin and cryptocurrency in general, investing in Greenidge Generation may not be for you.
Still, we can at least say that the stock is now trading at a cheaper price point than it was in mid-September.
Additionally, GREE stock no longer appears to be in free fall, so now you may have a cheap entry point.
Miners in the thousands
While the company’s merger with Support.com should bring long-term benefits, investors cannot expect Greenidge Generation to immediately see positive results from this transaction.
Therefore, it shouldn’t be overly shocking to learn that Greenidge’s preliminary operating results for the third quarter of 2021 show a net profit loss.
The expected net loss, Greenidge admits, is at approximately $ 30 million in costs related to the Support.com merger.
That’s the initial financial impact of the deal, so it’s really only a temporary setback. The good news is that Greenidge Generation expects quarterly sales between $ 33 million and $ 37 million.
Also, the company ended the third quarter with a present value of $ 52 million and a fair market value for its cryptocurrency holdings. So Greenidge’s record seems solid.
But this is where the rubber really hits the road: In the third quarter, Greenidge Generation mined a whopping 729 BTC and around 15,300 miners with 1.2 EH / s (Exahash per second) combined capacity were in use.
Targeted at $ 78
That’s a lot of hash power. However, how much shareholder value will it offer?
B. Riley analyst Lucas Pipes appears to believe that Greenidge Generation’s massive mining capacity could help shareholders double their investments or even more. Lucas and his colleagues at B. Riley have assigned GREE stock a price target of $ 78 and a “Buy” rating, suggesting a lot of upside from the current stock price.
Again, Greenidge Generation’s rapid mining production is the focus of attention. B. Riley said Greenidge could achieve a hash rate of 3.1 EH / s by the end of 2022 and 6.8 EH / s by the end of 2023.
That is amazing, but not out of reach.
Pipes added: “[w]We believe Greenidge can fund this growth with cash, free cash flow and debt. ”This suggests that the company has sufficient capital to pursue its ambitious crypto mining vision.
Take that away
Only time will tell if GREE stock is destined for $ 78 or more.
Since there is some correlation with Bitcoin price, expect volatility in the stock. So please don’t feel the need to top up Greenidge shares. However, a small position could be defensible. This is especially true now that the price of GREE shares has fallen.
With that said, you might consider owning a few shares of the stock today as Greenidge Generation is aggressively, but cleanly, mining crypto.
At the time of publication, neither Louis Navellier nor the InvestorPlace Research associate primarily responsible for this article held (either directly or indirectly) any positions in any of the securities mentioned in this article.
The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s posting guidelines.
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