Sphere 3D Stock is Speculative Bitcoin Renewable Energy Mining Play

Virtualization and data management company Sphere 3D NASDAQ: ANY stock spiked on the announcement of merging with bitcoin miner Gryphon Digital Mining in Q3 2021. The virtualization, HVE converged and hyper-converged infrastructure solutions provider is jumping on the bitcoin bandwagon with a twist. The notion that bitcoin mining contributing to global warming can be linked to the tremendous amount of energy needed to power the rigs to mine the bitcoin. This energy is usually from the grid and powered by traditional coal, which generates carbon. The source of the electricity that powers bitcoin miners has been raised by leading influencers like Elon Musk, the CEO of Tesla NASDAQ: TSLA as a reason for pulling its acceptance of bitcoin as a payment option.  Gryphon Digital is seeking to power its bitcoin mining with 100% renewable energy. It’s a narrative that may prove timely, even if the fundamentals are literally non-existent. With the crypto mining crackdown happening in China, where 80% of the world’s bitcoin mining occurs, it should provide opportunities for miners located outside of China. The Company is reminiscent of a Marathon Digital NASDAQ: MARA or Riot Blockchain NASDAQ: RIOT that adjusted its core business which already had weak fundamentals, but arguably late to the game. Risk-tolerant speculators seeking a renewable energy bitcoin mining play can watch for opportunistic pullbacks in Sphere 3D shares for exposure.

Fiscal Q1 2021 Earnings Release

On May 14, 2021, Sphere 3D released its fiscal fourth-quarter 2021 results for the quarter ended March 2021. The Company reported an earnings-per-share (EPS) loss of (-$0.27) versus (-$0.28) for Q1 2020. Revenues were $0.9 million, versus $1 million for Q1 2020. Gross margins rose to 45.9% versus 45.8% year ago same period. Interest expense was $509,000 versus $9,000 in Q1 2020. Fundamentals are sloppy and not worth paying attention to since this is a narrative play on bitcoin and renewable energy-powered bitcoin mining.   

Hype and Bitcoin

The fundamentals are pretty much crappy for this company. They did $0.9 million in revenues and lost (-$2.6 million) in the process. The corner lemonade stand is more profitable. However, this is a narrative play on bitcoin produced by utilizing renewable energy. This need was created out of the decision by Tesla to no longer accept bitcoin as payment due to the carbon generation stemming from mining using electricity created by carbon-producing coal. It is said that the amount of electricity being used to power bitcoin mining rigs in China is equivalent to that of the country of New Zealand. China has also used the energy constraint that bitcoin mining is putting on the nation as one of the reasons for the clampdown on cryptocurrency mining in the country. The world’s largest producer of bitcoin rigs, Bitmain, has “temporarily” halted the sale of mining machines to abide by Chinese government wholesale ban and crackdown on mining. Bitcoin prices have literally halved off its highs as regulators around the world are cracking down and seeking ways to regulate the cryptocurrency market. Hi-risk tolerant speculators who believe bitcoin will continue to drive higher and with a renewable energy halo effect can watch shares of Sphere 3D for exposure on opportunistic pullbacks.

ANY Opportunistic Pullback Levels

Using the rifle charts on the weekly and daily time frames provides a precision view of the landscape for  ANY stock. The weekly rifle chart has an uptrend with a rising 5-period MA near the $2.30 Fibonacci (fib) level. The weekly upper Bollinger Bands (BBs) sit at $3.66. The weekly stochastic is still rising with a mini pup through the 40-band. The weekly formed a market structure high (MSH) sell triggering under $2.61. The weekly market structure low (MSL) buy triggered above $1.57. The daily rifle chart is uptrending but stalling as the 5-period MA flattens at $2.75. The daily formed a MSL trigger breakout above $2.40. The daily stochastic has a mini pup with upper BBs at $3.39. Speculators can wait for opportunistic pullback levels at the $2.30 fib, $2.06 fib, $188 fib, $1.57 fib, and the $1.34 fib. Upside trajectories range from the $4.01 fib level up to the $5.54 fib level. Shares should move in correlation to the price of bitcoin.