ABTC Stock Gains On BTIG ‘Buy’ Rating – Eric Trump-Backed Company Was ‘Built’ To Buy Bitcoin, Says Analyst

Shares of ABTC have rebounded about 60% from their late-July low, though the stock remains down for the year.

• BTIG cited American Bitcoin’s growing Bitcoin treasury and mining business.
• It noted that the company holds about 8,000 Bitcoin, making it one of the larger publicly traded U.S. corporate holders.
• The company mined about 932 Bitcoin in the second quarter and said its cost to mine one BTC was about $36,500.

Shares of American Bitcoin Corp. (ABTC) edged higher in early morning trade on Wednesday after BTIG initiated coverage with a 'Buy' rating on Wednesday.

According to TheFly, the firm set a $15 price target and said American Bitcoin was built to buy Bitcoin (BTC). It noted that the business has about 8,000 BTC on its balance sheet and, among U.S. publicly traded companies, the Eric Trump-backed firm was about the 15th-largest holder. 

BTIG said its price target rise was driven by the company's mining operations and continued strategic acquisitions, which should help its Bitcoin stack grow faster than many competitors'. The firm also thinks Bitcoin's price will continue to rise over time and that adoption is growing, but supplies are running out.

ABTC stock was up over 1% in pre-market trading, defying broader market weakness. On Stocktwits, retail sentiment around ABTC remained in the ‘bearish’ zone, accompanied by ‘low’ chatter levels over the past day.

BITG’s $15 target implies over 88% upside for ABTC stock from Tuesday’s close. The stock has shed about 50% since early March, sank to a low of around $5 in late July, and has since rebounded about 60%. BTIG’s target aligns with the average analyst price target of $15, according to Koyfin data.

Record Output, Narrower Loss

In its second-quarter (Q2) results, the company said it mined about 932 BTC, up around 14% from its previous quarter. The company said its holdings rose to about 8,002 BTC as of June 30 from about 7,021 at the end of March. That total includes about 3,090 BTC committed to buy miners under agreements with Bitmain. 

The company posted a net loss of $57.2 million in Q2, compared with $81.8 million in Q1. Most of it was a $71.2 million loss on online assets. The company said the cost to mine a Bitcoin in the quarter was about $36,500. Hut 8 Corp. (HUT) owns a majority stake. 

Eric Trump Faces Cost Questions

In August, Eric Trump said on the Wolf Financial podcast that the company’s Bitcoin mining was producing between 11 and 13 BTC a day, with gross margins of nearly 49%, and operating close to 90,000 miners. But in April, Forbes estimated the all-in cost per coin at almost $90,000 after adding depreciation and overhead, which is much higher than the $57,000 figure Eric Trump has cited repeatedly.

ABTC stock was down 68% so far this year, while down over 92% in the last 12 months. 

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