Marathon Digital stock is falling despite higher Bitcoin prices. Here's why
In recent months, cryptocurrencies have witnessed a tremendous rally, with Bitcoin leading the charge. The rally has seen the most well-known cryptocurrency climb to well over the $60,000 mark (it currently sits at $62,421). Despite this, Marathon Digital (NASDAQ:MARA) stock is not performing so well lately.
As Bitcoin and other crypto prices have soared, investors anticipated that companies heavily involved in the ecosystem would benefit from this upswing, which is usually the way. However, Marathon Digital Holdings, a major player in the Bitcoin mining industry, has bucked the trend somewhat.
While Bitcoin is up more than 47% this year and 162% in the last 12 months, Marathon Digital has declined 2.8% in the year-to-date. What’s more, MARA stock fell more than 16% on Thursday after missing fourth-quarter earnings and revenue expectations when it posted earnings after the close on Wednesday.
While the stock has performed very well in the past 12 months (+260%), it currently sits just over $25 per share, way below its 2021 high of over $83. Over the last 52 weeks, shares are up 300%.
MARA reported a fourth-quarter loss per share of ($0.02), $0.03 worse than the analyst estimate of $0.01, while revenue for the quarter came in at $156.7 million, above the consensus estimate of $141.55 million.
Following the report, renowned short seller Jim Chanos said on X that he is still trying to understand the Marathon Digital business model.
“4Q EBITDA was $170M annualized, on $1B of capital invested in the business, ex-cash/crypto holdings($4 per share). Their 4Q breakeven cost was $42K per #Bitcoin. Like $MSTR, this is simply a leveraged bet on a commodity,” said the account.
Meanwhile, Compass Point analyst Joe Flynn said
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