The crypto miner Marathon Digital coming from the investment bank Jefferies won’t be able to reach its proposed target by the middle of 2023, according to the bank.
The investment bank chose to downgrade its Marathon Digital Holdings (MARA) rating from ‘buy’ to ‘hold’, citing construction delays as the primary reason. According to a letter to investors published by Amanda Santillo and Jonathan Petersen, Jefferies’ mining activity is put on hold due to a lack of transparency in execution risks for the miner’s hosting partners alongside mining economics starting to go downhill.
Furthermore, Jefferies opted to lower the price target from USD 12.50 to USD 4. Marathon Digital Holdings is an asset-light operating model. Jefferies’ Bitcoin miner owns the machines used for mining, however, they are hosted at various counterparties, on specially designed infrastructures. However, the hosting partners of MARA experienced serious delays in construction, which means that the investment in Marathon will still have to wait to bear fruit.
Initially, Jefferies’ plans included that the Marathon programme will produce a computing power of 23 EH (exahash)/second by mid-2023. Now, the bank hopes that the machines will start running by 2023’s end. In pre-market trading, Marathon shares went up by 3 per cent, arriving at USD 4.23 per share.