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Mark Holder

MGT Capital: Reality

Despite an SEC Subpoena and a blocked merger, people actually woke up today surprised that MGT Capital (MGT/MGTI) was delisted from the NYSE (see info here). The reality is that the company had a lot of proposals about business opportunities, but not a lot of actual business needed for listing on the biggest exchange. Hence, the company moved to an OTC listing under MGTI where the stock belonged all along. 

The facts about the business as listed my MGT today:

  • Acquired operating assets of two cybersecurity devices. 
  • Only 15 employees and consultants.
  • Bitcoin operation generating $50,000 per month, offsetting $300,000 per month in costs of operations. 
  • Cash of $2.1 million and $750,000 of marketable securities. 

Being off the NYSE might allow MGT to complete the D-Vasive and Demonsaw acquisition. As well, John McAfee can prove that these cybersecurity products work and are in demand. Either way, the stock is a major gamble with so many red flags, especially considering these statements from the guy leading the technology of Demonsaw. 

MGT remains nothing more than a hope trade. Maybe John McAfee will make investors a lot of money, but nobody can predict such an outcome based on the actions so far. Heck, one can't even predict where the stock will trade and that is a bad reality for investors. 

Disclosure: No position

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