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Mawson Infrastructure Group (NASDAQ:MIGI) stock retreated 9.2% in Thursday mid-afternoon trading after Cantor Fitzgerald analyst Josh Siegler downgraded the bitcoin (BTC-USD) miner to Neutral from Overweight due concerns about its liquidity.
Siegler expects the company’s hosting revenue, which represents about half of its total revenue, to fall to zero, despite strong demand for such a service. That’s because Mawson’s (MIGI) only hosting partner, Celsius Mining, told the company in July that it would not renew the hosting pact.
MIGI said it’s in talks with potential new customers to replace Celsius, though a timeline for securing such a customer has not been provided, the note said.
“Without its hosting cash flow, we believe Mawson will continue to burn cash, in the near term,” Siegler contended, noting a significant bull run in bitcoin (BTC-USD) could help offset the cash burn and potentially eradicate liquidity risks.
The Neutral rating falls between the SA Quant system rating of Strong Sell and the average sell-side analyst rating of Strong Buy.
