MARA Marathon Digital Holdings Stock Analysis, Sell Mode?!

Extrinsic Trades

5 Mar 202403:49

Summary

TLDRToday's analysis focuses on Marathon Digital and its recent performance amidst a broader downturn in mining stocks. Despite a promising pre-market gap up, the stock struggles at a key support level, coinciding with its 50-day moving average. The video highlights recent negative trends in the stock and the sector, including the impact of a significant shelf offering by Marathon, potentially diluting shares by 25%. Additionally, the discussion touches on Bitcoin's volatile price action, reaching new highs before a sharp pullback. The video concludes with technical insights on potential support levels and the implications of short sale restrictions after significant drops.

Takeaways

🔍 The analysis focuses on Marathon Digital Holdings (MARA) stock and the overall crypto mining sector on March 5th, 2024.
📉 MARA stock was gapping down, with 5 out of the last 6 trading sessions being negative, including a 12% drop on the day of analysis.
⚠️ Other crypto mining stocks like Riot Blockchain and CleanSpark were also down, along with MicroStrategy (MSTR) after its convertible notes offering to buy more Bitcoin.
💰 Bitcoin (BTC) hit a new all-time high of over $70K but then flushed down to $65K on the day of analysis.
📄 MARA filed for a $1.5 billion shelf offering, potentially diluting existing shares by 25%, and another filing for 15 million shares for employee benefit plans.
🎯 Key support levels for MARA stock are being watched at $22 (50-day moving average), $16-$15, and $15.50 (200-day moving average consolidation zone).
🛡 Short sale restriction rules may kick in after a 10% downdraw, limiting short selling below the highest bid.
📈 The analysis suggests MARA stock could potentially drop to the $15-$16 range or even down to the $15.50 support level.
📊 Technical analysis and monitoring of SEC filings are emphasized as important factors in evaluating MARA's stock movement.
🌐 The analysis provides insights into the broader crypto mining industry and its correlation with Bitcoin price movements.

Q & A

What stock is the transcript primarily discussing?
-The transcript is primarily discussing Marathon Digital Holdings (MARA), a cryptocurrency mining company.
What was the pre-market price range mentioned for MARA?
-The pre-market price range mentioned for MARA was between $24.50 and $22.69.
What technical levels is the speaker watching for MARA?
-The speaker is watching the $22.69 level, which was a previous support level and also corresponds to the 50-day moving average. Additionally, they are watching the $16 and $15 levels, which are the 200-day moving average and a previous consolidation zone.
What news about MARA's filings is discussed?
-The transcript mentions that MARA filed a shelf offering a few days after their earnings report, which could dilute existing shares by up to 25% as they plan to sell up to $1.5 billion worth of shares. Additionally, it mentions a filing on March 4th related to offering securities to employees and employee benefit plans, registering an additional 15 million shares.
What is mentioned about Bitcoin's price action?
-The transcript states that Bitcoin was making new all-time highs, reaching over $70,000 before flushing down to $65,000.
What other cryptocurrency mining stocks are mentioned?
-The transcript mentions Riot Blockchain (RIOT) and CleanSpark (CLSK) as other cryptocurrency mining stocks that were down on the day.
What is mentioned about the short sale restriction for MARA?
-The transcript states that after a 10% down move, a short sale restriction kicks in for MARA, meaning traders cannot sell short at the bid price and must sell above the highest bid.
What is the overall sentiment expressed about MARA's stock price?
-The overall sentiment expressed about MARA's stock price is bearish, with the speaker noting that 5 out of the last 6 trading sessions were negative, and suggesting the stock could potentially fall to the $15-$16 level.
What other company is mentioned in relation to Bitcoin?
-MicroStrategy (MSTR) is mentioned as a company that did a convertible note offering to buy back more Bitcoin, and its stock price was also down on the day.
What is the speaker's advice to viewers regarding MARA's filings?
-The speaker advises viewers to read MARA's SEC filings themselves, stating: "I'm just surprised people don't watch the filings SEC filings you can do it yourself well they did a few days ago right after they did their earnings they reported earnings, they filed shelf offering which means they will be selling little by little, whenever they want whenever they can, um up to 1.5 billion worth of shares, which is diluting your shares by 25%, depending wherever the market cap but, when they filed it market cap of the, mara was around 6 billion so one half, billion 25% so you can assume that your, one share is worth now 75 and also, another filing yesterday March 4th, Securities to be offered to employees, and employees benefit plans you can go, through this form as well read read read.

Outlines

00:00

👀 Marathon Digital Stock Analysis

This paragraph provides a technical analysis of Marathon Digital's stock, discussing the pre-market low, support levels around $22.69, the downtrend over the past 6 trading sessions, and the negative performance of other cryptocurrency mining stocks. It mentions Marathon's filing for a $1.5 billion shelf offering, diluting existing shares by 25%. The analysis highlights key support levels at $22, $15 (200-day moving average), and the $15-$16 consolidation zone.

Mindmap

Keywords

💡Marathon Digital

Marathon Digital is a cryptocurrency mining company that is the subject of discussion in the video. The speaker is analyzing the stock's technical performance and recent filings with the SEC. Marathon Digital's stock ticker is used frequently in the script, indicating the focus on this particular bitcoin mining company.

💡Bitcoin (BTC)

Bitcoin, represented by its ticker symbol BTC, is the world's first and most well-known cryptocurrency. The video mentions Bitcoin hitting new all-time highs above $70,000, and discusses how Marathon Digital, as a bitcoin mining company, is affected by the cryptocurrency's price movements. Bitcoin's price fluctuations are a significant factor in the analysis of Marathon Digital's stock.

💡SEC filings

SEC filings refer to the documents and reports that publicly traded companies like Marathon Digital are required to submit to the U.S. Securities and Exchange Commission (SEC). The speaker emphasizes the importance of reviewing these filings, as they contain crucial information about the company's operations, financial performance, and any potential dilution of shares through offerings or employee stock plans.

💡Dilution

Dilution refers to the reduction in the ownership percentage of existing shareholders when a company issues new shares. The video script highlights Marathon Digital's SEC filings, which indicate the company's intention to sell up to $1.5 billion worth of new shares, potentially diluting existing shareholders' stakes by approximately 25%. This dilution could impact the value of Marathon Digital's stock.

💡Support levels

In technical analysis, support levels refer to price points where a stock's downward trend is expected to pause or reverse due to increased buying pressure. The speaker identifies several support levels for Marathon Digital's stock, such as the $22.69 pre-earnings run-up level, the 50-day moving average, and the $15-$16 range around the 200-day moving average. These support levels are crucial in determining potential areas of price stability or rebounds.

💡Moving averages

Moving averages are technical analysis indicators that smooth out price data by calculating the average price over a specific time period. The video mentions the 50-day and 200-day moving averages, which are commonly used by traders and analysts to identify trends and potential support or resistance levels. The speaker examines Marathon Digital's stock price in relation to these moving averages.

💡Short sale restriction

A short sale restriction is a regulatory rule that prohibits certain types of short selling activities when a stock's price has declined significantly. The speaker notes that after a 10% downdraft, a short sale restriction kicks in for Marathon Digital, meaning short sellers cannot sell at the bid price but must sell above the highest bid. This restriction can impact the stock's trading dynamics.

💡Other miners

The video script also mentions other cryptocurrency mining companies, such as Riot, Clean Spark, and MSTR (MicroStrategy). These companies are likely referenced as a comparison to Marathon Digital, as they operate in the same industry and may be affected by similar market conditions or trends related to cryptocurrency prices and mining operations.

💡Technical analysis

Technical analysis is a trading discipline that involves analyzing historical price data, chart patterns, and various technical indicators to identify potential trading opportunities and make investment decisions. The speaker in the video is primarily focused on the technical aspects of Marathon Digital's stock, such as price movements, support and resistance levels, and moving averages, rather than fundamental factors.

💡Earnings

Earnings refer to a company's financial performance and profitability over a specific period, typically a quarter or a fiscal year. The video script mentions Marathon Digital's earnings report and the subsequent pre-earnings run-up in the stock price, which is a common phenomenon where a company's stock price may rise in anticipation of positive earnings results.

Highlights

Analyzing the technical indicators and price action of Marathon Digital Holdings (MARA) stock.

Observing the pre-market lows around $24.50 and the current support level at $22.69, which is also the 50-day moving average.

Noting that out of the past six trading sessions, five were negative, and MARA is down around 12% today.

Other cryptocurrency mining stocks like Riot, CleanSpark, and MicroStrategy (MSTR) are also down today.

Bitcoin (BTC) hit a new all-time high above $70,000 but then flushed down to $65,000.

Highlighting that Marathon Digital filed a shelf offering to sell up to $1.5 billion worth of shares, potentially diluting existing shareholders by 25%.

Marathon Digital also filed to register an additional 15 million shares for employee stock plans.

Short sale restriction kicks in after a 10% downward move, preventing short selling at the bid price.

Expecting the stock to consolidate around the 50-day moving average support level of $22.69.

Identifying the potential support levels at $16, $15, and the 200-day moving average around $14.50 if the stock loses the $22.69 level.

Emphasizing the importance of reading SEC filings to understand company actions that may impact stock prices.

Comparing the price action and performance of MARA with other cryptocurrency mining stocks and Bitcoin.

Analyzing the potential impact of dilution from the shelf offering and employee stock plan filings on existing shareholders.

Discussing the technical indicators, such as moving averages and support levels, used in the analysis.

Providing a comprehensive overview of the current market conditions and factors affecting MARA and the cryptocurrency mining industry.