Why is Sphere 3D (NASDAQ: ANY) higher by roughly 975% since August? Because they are about to close a transformational deal with Gryphon Digital Mining to turn its company into a revenue-generating juggernaut. And investors didn’t hide their enthusiasm about the planned merger, either, sending shares higher by more than 235% intraday to multi-year highs.
Better still, although shares pulled back to their current $6.69 level, they have that $11.98 high in its crosshairs, supported by revenue-generating power going forward. Moreover, profit-taking appears exhausted, setting the stage to meet that objective sooner rather than later. Still, the pullback shouldn’t leave investors complaining; Sphere 3D shares are already back in fashion, higher by more than 20% since the start of the month. Thus, those still in line ready to take profits may be jumping the gun.
In fact, while Sphere 3D shares presented a valuation bargain at prices above $11, the investment opportunity now is outright compelling. Some of the price models published over the past month, in fact, place a more appropriate share price target between $24-$72 over the next three quarters. Yes, it’s a wide gap, but it’s also proper in the sense that ANY can grow into its valuation rather than living with a more risk-based price that can’t yet be backed by fundamentals.
Hence, measured growth and less aggressive price gaps should be preferred for both near and long-term investors. After all, massive swings, like the one in September, can be hard to manage, leaving investors to trade on technicals instead of fundamentals. In turn, more often than not, good money is left on the table.
Why All The Commotion?
Interestingly enough, not a whole lot of people knew about this roughly $337 million market cap company at the start of the year. Although early investors were touting its potential, ANY wasn’t getting very much market coverage. Of course, after announcing its expected merger with Gryphon Digital Mining, that changed. Now, investors and analysts are both in ANY’s corner. The better news is that each maintains a bullish thesis.
And rightfully so. During the past few quarters, ANY has done the right things at the right time, systematically assembling an arsenal of assets that could make them one of the most powerful companies in the bitcoin mining space. Best of all, they are doing it the right way.
ANY isn’t just wanting to be one of the world’s largest BTC miners; they plan to earn its spot with a zero carbon footprint. For those following comments from even the staunchest digital asset proponents like Elon Musk of Tesla (NASDAQ: TSLA), the greener the business, the better the opportunity to earn a substantial piece of a new generation of mining. Even better for ANY, “dirty mining” will soon be squeezed out of the market, sparing not even those with billions invested in energy gulping machines. And with a recent report suggesting that BTC mining currently uses more energy than the entire country of Argentina over a year, changes will come faster than many expect.
The more excellent news from an investor’s perspective, ANY isn’t penetrating the markets with assets only. They are led by industry veteran and sector visionary Rob Chang, the former CEO of RIOT Blockchain (NASDAQ: RIOT), which is at the top of the digital chain when it comes to mining.
And with his experience comes wisdom and an insider’s knowledge that being ahead of the inevitable shift in mining practices is well to his advantage. Thus, combining industry know-how with state-of-the-art mining solutions should have not only RIOT nervous but industry giant Marathon Mining (NASDAQ: MARA) as well. By the way, no one’s suggesting that either of these two competitors won’t survive. However, with ANY getting the head start to mine with a zero-carbon footprint, they may very well capture a good portion of each’s market share.
And there’s a good reason for that to happen.
BTC Mining Goes Green
Foremost, ANY is changing the digital asset mining landscape in cost, size, and for that matter, perspective. And at its core is its energy-saving, green technology that uses only about 1.3 cents per kWh when operating at maximum efficiency. Not only is that a substantially lower cost than others in the industry, but models also show that it puts ANY at a mining break-even cost of about $4,036 per bitcoin. That means that at BTC’s current $54,900 level, the gross margins are enormous.
Still, don’t consider an investment in ANY on that basis. Equally important is that from an Environmental, Social, and Governance (ESG) perspective, ANY is positioned to be the first carbon-neutral, even carbon-negative, BTC miner in the space. That metric is enhanced with its purchase of 500,000 carbon offset credits. Better still, it’s doing what its competitors aren’t, adapting more quickly to a fast-changing industry.
Further, its combined technology resulting from its planned merger brings best-in-class, energy-efficient mining solutions to the market. Moreover, its “SnapMine” GPU-based cryptocurrency mining solution will allow ANY to mine not only BTC but also other coins outside of bitcoin. That adds diversification as well as a competitive advantage.
Also, the combined efforts and assets can perpetuate ANY’s data-center expertise to expand its interests into building additional clean-crypto mining solutions. Simply put, not only is ANY ushering in the change to green-mining, they can become the world’s largest miner in the process.
Steps to reach that pedestal are being taken.
Contracts To Acquire Massive Mining Assets
In September, ANY announced that it made an $85 million payment towards its previously announced purchase order for 60,000 Antminer S19j Pros, which is currently considered the industry-leading mining solution. Delivery on those is expected to start next month.
Better still, after making certain adjustments to the original miner model mix, ANY will also be taking delivery of additional capacity than was previously reported, with a total of 6.0 exa-hash of capacity once its deliveries are completed. Even better, once its merger with Gryphon Digital Mining closes, ANY will have a total capacity of 6.7 exa-hash, an amount capable of producing over 1,300 bitcoin per month. In dollar terms, at today’s prices of $54,900, that’s roughly $71.3 million in BTC value per month.
ANY isn’t stopping there, either. They recently raised more than $200 million with plans to use some of that cash to purchase additional miners in a move that could make them one of, if not, the, top miners in the industry. Notably, that plan is in action, with ANY’s first miners already running and an expected 7,200 more being delivered. Combined, the two companies will have at least 67,200 state-of-the-art machines in the queue for delivery, making them one of the industry’s top miners measured by exa-hash.
Hence, with assets and tools in place and with more to come, ANY will likely produce upwards of $1 billion in revenues in the next two years. If BTC continues higher, revenues will follow. Of course, don’t expect a straight line up, either. Like all markets, BTC will have peaks and valleys. But, as global interest swells, the long-term forecast is decidedly bullish.
Thus, it’s good to know that while its competitors appear to be walking, ANY is running. That means that while ANY isn’t the biggest today, expect them to close the gap quickly. Sometimes, having ambition in a game of catch-up is a competitive advantage. And with leadership enabling ANY to move fast, passing competitors, not catching up, is the intended strategy.
A Surge In 2022
So, while 2021 has been transformative for ANY, expect 2022 to be even better. And its recent share price at $6.69 presents a compelling opportunity to benefit from prices that appreciably undervalue future revenues. With BTC surging past resistance in the past week, that’s assuredly the case.
Still, expect some investors to sell into strength. After all, those investors from only a two months ago are enjoying triple-digit percentage increases. Hence, watching the ticker every minute may not be an accurate indicator of ANYs fundamental strength. Also, as BTC fluctuates, so will its price.
But, understanding the sector and ANY’s position in it, shows the company to be ideally positioned to steepen its growth curve and create tremendous shareholder value in the process. Thus, to those wanting exposure to the emerging green-mining sector, ANY is the market’s best and most pure play. Taking it a step further, they may become the leading mining company in the world as they usher in that change.
Know this, too. ANY has every intention of earning that crown. In fact, as recently noted, when combined with Gryphon’s order, ANY will have 21.5 exa-hash of mining power, ranking them as the largest known miner in the world. Thus, in addition to investing in assets and ambition, following the soon-to-be leader may also be wise.