Bitfarms fires CEO, shares plunge, sell or HODL ?
Bitfarms fires CEO, shares plunge, sell or HODL ?
Bitfarms's fundamentals remain unchanged. According to the contrarian approach, Bitfarms is a strong buy
Bitfarms should triple its exahash within 7 months, I think it's a market overreaction.
You almost never start valuing a company or stock with a blank slate.
All too often, your views on a company or stock are formed before you start inputting the numbers into the models and metrics that you use and, not surprisingly, your conclusions tend to reflect your biases.
Professor Aswath Damodaran
The facts :
BitFarms is approaching its 52-week low, in line with my strategy of buying equities and derivatives.
Today, we reached the low point of 2024.
I think this is an overreaction by the market, as Bitfarms' fundamentals remain solid.
So, I'm going to rely on fundamentals as well as the contrarian investing approach.
Contrarian Investing
Contrarian investing involves buying assets that are currently unpopular or undervalued, going against prevailing market sentiment. The goal is to profit from potential price recoveries when market sentiment eventually shifts.
Contrarian investors believe markets can overreact, leading to mispricing of assets that offer value opportunities in the long run.
A lawsuit has been filed by the ex-CEO of Bitfarms against the company, but I think this has to be balanced against the fact that Bitfarms' fundamentals are solid.
Thesis :
Indeed, every time there's good news (positive earnings announcements) or bad news (as in this case), crowd psychology takes over from the fundamentals.
This, like the Fear and Greed Index in cryptos has taken us from neutral sentiment (for Bitfarms) to fear in the space of a few days, due to the uncertainty surrounding the implications of the Bitfarms CEO's lawsuit against the company.
In short, Smart Money is buying now, while Dumb Money is panicking, taking profits at best or selling at a loss to position itself in the shares of better-performing BTC miners.
I'm confident that Bitfarms will meet its targets:
- 21 ExaHash within 7 months probably.
The balance sheet is solid: - Bitfarms has virtually no debt and 100 million in cash.
So I think Bitfarms is clearly undervalued.
That's why I decided to buy more Bitfarms options expiring on January 16, 2026 with a strike of $7.5 for $40 per premium. Feel free to check my positions on those additional trades just below :
EDIT : I sold all my miners stocks and options to rotate into SDEX because I believe it has a better risk/reward ratio.
This is my analysis, please DYOR (Do Your Own Analysis) before buying an asset.
