Marathon Digital's Stock Price Falls in Q2 Due to Bitcoin Halving

Marathon Digital's Stock Price Falls in Q2 Due to Bitcoin Halving

Marathon Digital, a U.S.-based Bitcoin mining company, reported second-quarter 2024 earnings that fell short of Wall Street expectations, leading to a decline in the company's stock price.

From April to June 2024, Marathon Digital recorded total revenue of $145.1 million, approximately IDR 2.3 trillion. According to data from Yahoo Finance, this figure is 9% lower than Wall Street analysts' predictions of $157.9 million, or around IDR 2.5 trillion.
Marathon revealed that its sales were affected by several operational challenges that hindered its ability to mine Bitcoin. The Bitcoin Halving event in April 2024 also weighed on their mining sector.

"During the second quarter of 2024, our BTC production was impacted by unexpected equipment failures, maintenance on transmission lines at the Ellendale site operated by Applied Digital, an increase in global hash rate, and the April Halving," said Marathon Digital CEO Fred Thiel.

As a result of this report, MARA's stock price fell by 7.78% to $18.14 in Thursday's (August 1, 2024) trading, according to Google Finance data. In the past week, MARA's price has dropped by up to 16%.

Selling Bitcoin to Cover High Operational Costs

Marathon's earnings report highlighted that the average price of Bitcoin mined during the second quarter was approximately 136% higher compared to the same period in 2023.
In an effort to cover operational costs, Marathon Digital sold 51% of the Bitcoin they mined during this quarter.

Additionally, adjusted EBITDA for the second quarter shifted to a loss of $85.1 million, equivalent to IDR 1.3 trillion, from a profit of $35.8 million, or around IDR 580 billion, in 2023. This was primarily due to unfavorable fair value adjustments of their digital assets and a decrease in the number of Bitcoins mined.

Despite these challenges, the company stated that they achieved a record hash rate of 31.5 exahash per second (EH/s) during the period. They are optimistic about reaching a hash rate of 50 EH/s by the end of 2024.

Conclusion

Marathon Digital faced significant challenges in the second quarter of 2024, leading to a decline in both their revenue and stock price. Operational setbacks, including unexpected equipment failures and maintenance issues, compounded by the impact of the Bitcoin Halving event in April, hindered their Bitcoin mining capabilities. Despite these difficulties, Marathon managed to sell a significant portion of their mined Bitcoin to cover operational costs. However, this was not enough to prevent a shift to an adjusted EBITDA loss. Nevertheless, the company remains optimistic about the future, citing a record hash rate achievement and ambitious goals for the end of the year.

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