Digital Marathon (NASDAQ: MARA) stock has fell 8.8% Friday morning after BTIG analyst Gregory Lewis downgraded the bitcoin miner to Neutral from Buy following news that its major hosting provider had filed for Chapter 11 bankruptcy.
Compute North filed for Chapter 11 late Thursday, according to many media reports. This form of bankruptcy allows a company to restructure its debts while continuing its activities.
Marathon (MARA) said on Thursday that the deposit by one of its hosts “will not impact our current mining operations”, in a tweet.
Lewis, however, said he expects Compute North’s restructuring “to weigh on MARA’s ability to grow hashing capacity. However, in the longer term, Compute North’s bankruptcy could offer MARA opportunity to create a data center infrastructure footprint at distressed prices.”
The analyst estimated that Compute North should provide around 45% of Marathon Digital’s (MARA) hosting capacity in mid-2023 with a target of around 23 exahash/second.
Meanwhile, bitcoin pricing (BTC-USD) is not helping bitcoin miner stocks. This is 1.7% over the past 24 hours, recently trading at ~$18.7,000.
Lewis’ Neutral rating aligns with Neutral’s Quant rating and deviates from the average Wall Street rating and the average SA author rating, both of which are Buy.