Marathon Digital Holdings (MARA)
J Capital Research ("J Cap") is a stock-research company. J Cap has analyzed the U.S.-listed company Marathon Digitial Holdings (“MARA”) and is hereby publishing the outcome and the conclusions of our analysis, based on publicly available information. We may be short shares of MARA and, for this reason, there might be a conflict of interest. By viewing this material, you agree to our Terms of Service.
Initiation Report: March 3, 2023
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We conclude that:
‣ MARA may have taken at least $250 million out of the company via overstated purchases of miners. We draw that conclusion based on interviews with mining companies in China. ‣ About 64% of MARA’s mining fleet, net of disposals, nearly 126,000 machines, are not in use. The most recent order was 11 months ago. ‣ Silvergate Bank, historically MARA’s biggest source of liquidity, just announced that it can’t file its 2022 financials on time and may not be able to continue as a going concern. Shares fell about 45% on the news. That was just two days after MARA announced it could not publish its 2022 10K as scheduled “due to certain accounting errors.” Yet the “restatement issues” MARA cited were not among those we discuss in this report. Surely the SEC will sit up and take notice. ‣ MARA’s crypto-mining business did not make money even when Bitcoin was averaging around $47,500. When bitcoin prices rise, investors should make money, but potential gains have consistently been lost in stock compensation. In 2021, stock-based compensation was $161 mln – more than net revenue – even as MARA lost $13 mln pre-tax. And in 2021, MARA had just 10 employees. ‣ MARA has made a series of highly questionable payments, awarding shares to a company that appears not to exist, paying $35.5 mln to a related party company without disclosing that company’s business, making huge deposits with service providers for unclear reasons, and much more. 
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Some of the company's executive changes
Source: MARA disclosures
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