Q4 2023 Earnings Summary
Reported on Feb 18, 2025 (After Market Close)
Pre-Earnings Price$1.72Last close (Mar 19, 2024)
Post-Earnings Price$1.71Open (Mar 20, 2024)
Price Change
$-0.01(-0.58%)
- Low-Cost Producer with Profitability Post-Halving: TeraWulf is among the lowest-cost producers in the industry, with a cost to mine Bitcoin of approximately $25,000 per Bitcoin before the halving and $37,000 after the halving, positioning the company to remain profitable even after the halving.
- Significant Insider Ownership Ensuring Alignment: Management and insiders have significant ownership stakes in TeraWulf, ensuring strong alignment with shareholders and a focus on long-term value creation.
- Scalable Infrastructure and Diversification Opportunities: TeraWulf's scalable infrastructure, access to low-cost, zero-carbon power, and significant capacity position the company to capitalize on growth opportunities in both Bitcoin mining and emerging high-performance computing (HPC) and AI applications, potentially unlocking additional revenue streams and increasing the value of its assets.
- High Debt Levels and Liquidity Concerns: Despite reducing debt by $40 million over the last four months, management acknowledges that the company's debt remains a concern for investors. The CEO stated, "the perception that there is debt out there remains a reason why some people haven't invested yet". Additionally, the company has only "$20 million of excess liquidity" to navigate through the upcoming halving event, which may be insufficient given the industry's volatility and capital-intensive expansion plans.
- Uncertainty in Financing and Execution of Expansion Plans: The company plans to expand into High-Performance Computing (HPC) and AI services, requiring significant capital expenditure of "$1 billion to $2 billion" for 300 megawatts of capacity. However, management has not provided detailed financing plans and admits these projects "take time" and are in early stages. The CFO noted, "we have not announced how we're going to populate that building with miners" for the upcoming Lake Mariner expansion , indicating potential delays or challenges in executing growth initiatives.
- Elevated Short Interest Suggests Market Skepticism: There is a significant short interest in the company's stock, with approximately 47 million shares sold short, representing about 25% of the actual float. Management acknowledges this and notes that even some lenders have hedged their positions by shorting the stock, which may indicate a lack of confidence from key stakeholders. The CFO remarked, "some of them have sort of taken that market risk out by shorting the stock".