Stocks

What Support.com (SPRT) upcoming merger is about

Support.com (SPRT) and Greenidge Generation will merge in the coming quarter (Q3 21), which will most likely cause the share prices to explode in the coming days/weeks.

Experts are realistically talking about +50% but as always in these times, momentum is the key point to invest here. The market cap will increase from ~98M to ~1.5B and this increase is currently not yet priced in. 

Support is actually a relatively boring company and as the name suggests, it provides support services. Accordingly, the valuation of the stock for SPRT is good at 2 – 3 USD.

The highlight is the merger with Greenidge, which makes the whole thing so interesting. Greenidge is a Bitcoin miner from New York. The special thing is that Greenidge operates its own power plant.

As most people know, mining requires a lot of electricity. The advantage here is that the costs of the mining process can be controlled and adjusted very precisely to get the most efficient hashrate.

Greenidge cannot be publicly traded (hence the merger) and is still grossly undervalued compared to its direct competitors (e.g. RIOT). The nice thing is, you can compare these values easily because mining is really only about the hashrate. With this you can see how profitable a miner is running and where his market value is.

The hashrate of RIOT (the direct competitor) is 1.3HE/s with 43MW and the expected output of SPRT should be 41MW and at the end of the year 45MW.

Why should be and not is? There was a ban in New York State on power plants being used for bitcoin mining. This ban has now been lifted and 100% of the juice can go into mining.

I personally think that right now (today) is a very good entry point. The substance of this stock is clearly given by the merger and in my opinion, the numbers promise strong growth within the next few weeks.

The merger will be carried out in the 3rd quarter and only then the new market cap will also be reached but since the deal is already fixed [3] it is now of course already started to be priced in.

Of course, such a thing does not remain a secret for long and various subs are logically already in the starting blocks. The next few days we will therefore, in my opinion, see a strong increase here.

Currently, the volume is low, which is why strong price fluctuations are actually unavoidable. For me, this is an advantage as I like it when hype is built up, but of course one has to be aware that a lot of movement can take place here in the short term. [4]

Long term, the odds are green for this stock and as seen in the view above, that with a very solid gain. In the short term, it will be exciting to see how much the investors resonate and perhaps drive the price to absurd heights. Because, as a reminder, the market cap is way lower than in the upcoming merger.

Article sourced from Reddit by u/dkbbroker