OTC:MGTI
MGT CAPITAL INVESTMENTS, INC.
A highly leveraged investment vehicle showing volatile earnings and minimal current revenue generation.
Key Metrics
Investment Thesis
Bull Case
The reported net profit of $5.5M suggests potential hidden value or accounting adjustments that could stabilize the balance sheet in future quarters.
Bear Case
Investors should avoid this stock due to the alarming current ratio of less than 0.02 and a retained earnings deficit that dwarfs total assets, indicating a high probability of insolvency without major restructuring.
About MGT CAPITAL INVESTMENTS, INC.
MGT Capital Investments Inc. operates as an investment holding company with a reported net profit of $5.5M in the latest fiscal year, though its revenue stream remains modest at $322k with significant debt relative to equity.
Analysis
Management Discussion
While the company reported a sudden net profit of $5.5M, this figure is heavily influenced by massive non-cash adjustments totaling -$6.7M and negative income tax expenses of -$6.6M, suggesting earnings quality issues. The operational reality shows a cash flow burn of nearly $547k from operations against minimal revenue growth.
Industry Overview
The company operates within a specialized investment or holding sector where capital structure management is critical, though its specific industry classification is obscured by the lack of traditional operating revenue metrics.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Revenue | $809.0K | $399.0K | $322.0K |
| Cost of Revenue | $0 | $0 | $0 |
| Gross Profit | $809.0K | $399.0K | $322.0K |
| Operating Expenses | $3.3M | $1.8M | $1.4M |
| Operating Income | $-2.5M | $-1.4M | $-1.1M |
| G&A | $1.7M | $1.4M | $1.1M |
| Depreciation | $196.0K | $260.0K | $194.0K |
| Other OpEx | $1.6M | $476.0K | $395.0K |
| Non-Operating Income | $0 | $0 | $0 |
| Interest Expense | $23.0K | $91.0K | — |
| Pre-Tax Income | $-2.5M | $-1.4M | $-1.1M |
| Income Tax | $3.5M | $4.7M | $-6.6M |
| Continuing Ops | $-6.0M | $-6.1M | $5.5M |
| Discontinued Ops | $0 | $0 | $0 |
| Net Income | $-6.0M | $-6.1M | $5.5M |
| Minority Interest | $0 | $0 | $0 |
| Net to Common | $-6.0M | $-6.1M | $5.5M |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Current Assets | $553.0K | $25.0K | $51.0K |
| Cash & Equivalents | $538.0K | $8.0K | $6.0K |
| Accounts Receivable | — | $17.0K | $45.0K |
| Prepaid Expenses | $4.0K | — | — |
| Other Current Assets | $11.0K | $0 | $0 |
| Long-Term Assets | $1.1M | $907.0K | $713.0K |
| PP&E (Net) | $1.1M | $907.0K | $713.0K |
| Other LT Assets | $3.0K | $0 | $0 |
| Total Assets | $1.7M | $932.0K | $764.0K |
| Current Liabilities | $5.4M | $9.8M | $3.3M |
| Accounts Payable | $11.0K | — | — |
| Current Leases | — | $96.0K | $20.0K |
| Other Current Liab | $5.4M | $9.7M | $3.2M |
| Long-Term Liabilities | $0 | $20.0K | $0 |
| LT Operating Leases | — | $20.0K | — |
| Other LT Liab | — | $0 | — |
| Total Liabilities | $5.4M | $9.8M | $3.3M |
| Shareholders' Equity | $-3.7M | $-8.9M | $-2.5M |
| Paid-In Capital | $421.5M | $422.3M | $421.5M |
| Retained Earnings | $-425.9M | $-432.0M | $-426.5M |
| Total L&E | $1.7M | $932.0K | $764.0K |
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Income (CFO) | $-6.0M | $-6.1M | $5.5M |
| Non-Cash Adjustments | $4.3M | $4.9M | $-6.5M |
| Working Capital Changes | $-458.0K | $537.0K | $467.0K |
| Cash from Operations | $-2.1M | $-710.0K | $-547.0K |
| Capital Expenditures | $68.0K | — | — |
| Cash from Investing | $-68.0K | $0 | $0 |
| Cash from Financing | $1.5M | $180.0K | $545.0K |
| FX Effect | $0 | $0 | $0 |
| Net Change in Cash | $-692.0K | $-530.0K | $-2.0K |
| Beginning Cash | $1.2M | $538.0K | $8.0K |
| Ending Cash | $538.0K | $8.0K | $6.0K |
Frequently Asked Questions
How does MGT CAPITAL INVESTMENTS, INC. make money?
The company's primary financial activity appears to be capital raising through common share issuances ($420k) and financing cash flows ($545k), while operating expenses and administrative costs suggest a service or holding structure with negligible cost of revenue.
What are the main risks for MGTI?
Extreme leverage evidenced by $3.3M in current liabilities against only $51k in current assets; severe negative retained earnings deficit of $426.5M indicating historical losses; declining revenue trend over the last three years from $800k to $322k.
What is MGTI's competitive advantage?
The firm possesses a unique ability to generate net income without proportional revenue, potentially leveraging tax attributes or non-operating gains, though this model lacks traditional product-based moats.
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