03 May Tipping Point Stocks Research WULF
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WULF- Terra Wulf $1.75 a share Target $3 to $6 2023
205 Million Shares outstanding, 240m Fully Diluted
$1.75 per share is 360 Million Market Cap. WULF generates 75 million in FREE Cash flow at $30,000 Bitcoin, 60 million at $25,000 Bitcoin per management
50% of stock is held by insiders including Insiders buying in open market
Bitcoin miner with a big twist (Power plant controls and lowest cost of energy production)
I spoke with the top management team over zoom call last week and believe this is the emerging top Bitcoin Miner in the entire sector, with proper valuation and great growth near term and intermediately just ahead
The management team has been together for 15-30 years as a group and were greatly successful in running powerplants , acquiring power plants and turning them around, and making extremely high returns for their investors.
They have taken their power generation knowledge and have applied it to Bitcoin Mining. They can generate the lowest kilowatt cost per hour in the entire industry and their Exahash rate is increasing dramatically, meaning more efficiency of production at a lower cost.
Based on current projections, they are already now cash flow positive and have an “All In” Cost of $16,000-$17,000 per Bitcoin which is among or perhaps the lowest in the industry. I do not mean their basic costs, I mean ALL IN… debt, expenses, overhead, you name it… the main reason being control of the powerplants and extremely low energy costs.
I project Bitcoin going to $35,000 intermediately from $29,000 area now and while it consolidates this is a good time to also build a position in WULF while it also is consolidating albeit running to 52 week highs of late as the story is now getting out weekly to investors.
Their production rates are currently increasing this quarter from about 233 Bitcoin per month in March to exit rate in June end of quarter 2 at 400 Bitcoin per month per management.
With 30,000 Bitcoin assumed they can pay down 70 million of the 140 million in debt into 2024, then trigger a clause to re-finance the remainder from 11.5% interest rates. They expect they will achieve this goal based on current production increases and costs dropping dramatically.
This will add about 8 million a year profits by my calculation next year just on interest savings alone.
If we take 400 Bitcoin in 3rd quarter at 16,000 all in cost, and assume $35,000 Bitcoin they will generate roughly 7.6 million per month in gross profits. Annualized would be just over 90 million in profit run rate. The average top bitcoin miner trades anywhere from 6x-9x price to revenues… here we would be at only 4x profits!!!
So in my view given they are increasing production, bringing on another 50mw in the 2nd quarter, and have access to site and shovel ready power plant sites others do not have going forward…. the stock remains undervalued here.
Using my exit rate in 2nd quarter we can forecast a run rate of 170m per year in revenues, put a 6x on that and we should be trading at least $3 a share later this year for a double potential, and higher if we take 15x profits we can see $6 a share by end of year.
At $1.75 this is a good time to start a position and continue to build it in my opinion.
I did a full 45 minute zoom call with management, but here is one that another top advisor in the space just participated in a few days ago, and I would suggest serious investors here at TPS spend the 55 minutes to listen/watch it.