Is Cryptostar in the Sky yet ?
For the last couple of weeks, Cryptostar (CSTR.V) went on a long, slow and steady downtrend. Indeed, the Company suffered a 53% loss for the last 6 months but is still up 442% year-over-year for a current $63M market cap. If at the beginning of the year, the stock saw a huge upside in its share price, it was mostly due to the high speculation in the crypto sector t while the company didn’t have much revenues. Now, the company is on track to receive contracts and mine too but it doesn’t affect the stock price while it should go up. Let’s do a recap of the recent contracts and agreements they received from the las couple of weeks.
Small recap about the company
At the very beginning, Cryptostar wasn’t mining. They used to only sell ASIC and GPU miners. Then, when the Bitcoin price started to go up, the board changed their politic. From selling miners to enable others to mine, they decided to keep those for them to mine. They also launched a crypto-farm facility in Alberta which where they would be able to host miners from other companies and mine by themselves. They also have a miner facility in Utah,USA. Despite material shortage, they have been able to secure and get miners. According to their last news report (September 15th, 2021), the Company had CAD$34,424,517 in total assets including $18,300,000 in cash, holds 235.9 in Ethereum and 47.6 in Bitcoin for $4,667,064 in liabilities. They had (0.003) loss par share basic and diluted ( last report) for 407,345,024 weighted average shares, basic and diluted.
Despite having good numbers, the company’s rejected by many investors because of the lack of transparency and the high amount of warrants and stock options. The stock options affected a lot the stock price as they were between $0.05 and $0.10. There are still more than 170M warrants and 17,527,110 options left.
This is the major concern for the investors. A dilution means a loss of shareholder’s value and more difficulties to see the stock price going up as the float is bigger than before.
Recap about the Latest news
The last news report is pretty big. If you take a look closely to it, Cryptostar has again got a contract for hosting, will be developing their mining revenues and continues to expand their Alberta location with more power supply:
- As at September 15, 2021, the Company has executed Equipment Hosting Agreements for an aggregate mining capacity of 27 megawatts (MW), with 12 MW of mining capacity located at its award-winning data centre facilities in Utah, USA and 15 MW of mining capacity to be deployed in Alberta, Canada in Q4 2021.
- The Equipment Hosting Agreements executed for an aggregate 12 MW of mining capacity in Utah, USA are anticipated to contribute annual hosting revenues for the Company of USD$1.7 million.
- The Equipment Hosting Agreements executed for an aggregate 15 MW of mining capacity to be deployed in Alberta, Canada in Q4, 2021 are anticipated to contribute annual power and hosting revenues for the Company of up to USD$7.9 million.
- The Company is continuing to increase its power capacity in Alberta, Canada, with an additional 10 MWs to be deployed under the existing power supply agreement for 30 MW.
- The Company currently has an aggregate self-mining Hashrate of 86,160 MH/s from GPU miners and 40,796 TH/s from ASIC miners running at its data centres.
- The 86,160 MH/s and 40,796 TH/s of existing self-mining Hashrate currently contributes USD$607,843.02 per month in self-mining revenue for CryptoStar. (Source: https://whattomine.com/ Mining metrics are calculated based on and ETH – USD exchange rate of 1 ETH = $3,405.31 and a BTC – USD exchange rate of 1 BTC = $47,379.50 updated at 2021-09-15 11:38:48 UTC).
- An additional 10,000 TH/s of Hashrate from ASIC miners has been delivered and will be deployed in the Company’s data centres by November 30, 2021.
For the last 30 days, if you wonder what news they released, they got :
- A contract for their facility in Utah for an annual hosting revenues of USD$720,000, renewing month-to-month thereafter ;
- A contract for their facility in Alberta for an annual hosting and power revenues up to USD$5.3 million, for a hosting term of 36 months, with the option to renew for an additional 36-month term.
Needless to say these numbers are good, and we should see more news about power supply or self mining.
If we just focus on the fundamentals, CSTR could do better. These dilutions and the high number of warrants are in issue for any potential investor and for the current shareholders. Besides, the Company ramps up and gets more and more great news from both sides, hosting contracts and mining.
Also, it will be interesting to see how the company will define themselves in the future. Would they rather focus more on the power supply service, or more on the crypto mining? Or simply having both to ensure stable revenues ?
This article solely expresses the opinion of the writer which might be disagreeing with the other writers of Money,eh?
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