Bit Digital Stock Declines After Worse-Than-Feared Q3 Loss: Retail Ignores The Numbers

Shares of Bit Digital Inc. ($BTBT) were down nearly 8% on Monday after the company reported third-quarter earnings that fell short of analyst expectations. Despite the miss, retail sentiment on Stocktwits remained bullish.

Bit Digital’s net loss widened to $0.26 per share from $0.08 per share last year, and came in much higher than Wall Street’s expected loss of $0.03 per share by a wide margin.

It also slightly missed analyst revenue expectations of $22.91 million with total revenue of $22.7 million. However, it was still a 96% increase compared to $11.6 million in the same period last year.

The growth was largely driven by the company’s High-Performance Computing (HPC) services, which generated $12.2 million in revenue during the quarter, up from zero in the year-ago quarter.

Meanwhile, revenue from Bitcoin ($BTC.X) mining declined 11% year-over-year to $10.1 million. 

The company earned 165.4 BTC in Q3 2024, a 59% decrease from the prior year, attributed to lower block rewards following the April halving and increased network difficulty. 

Despite these headwinds, Bit Digital reported a 104% increase in operational hash rate – the speed at which its mining equipment processes transactions on the blockchain – partially offsetting the decline.

Bit Digital's Sentiment and Message Volume on Nov 18 as of 2:00 p.m. ET | Source: Stocktwits

Retail sentiment on Stocktwits has inched up into the ‘bullish’ zone from ‘neutral’ a day ago despite the earnings miss, along with an uptick in chatter to ‘high’. 

Most users on the platform suggest that the company’s third-quarter earnings only missed their mark because Bitcoin’s recent rally wasn’t priced in. 

At the end of September, the total BTC equivalent of Bit Digital's digital assets was approximately 1,863 BTC, worth $118 million, according to the company’s earnings report. 

Bitcoin has gained 37% since then despite dipping back to the $90,000 range on Monday from its all-time high of $93,477 on Nov. 13.

At Bitcoin’s current price, Bit Digital’s BTC equivalent digital assets are worth approximately $168 million.

Despite the challenges in Bitcoin mining and a widened net loss, the company’s management reaffirmed its guidance for $100 million in run-rate revenue from its HPC business by the end of 2024. 

Bit Digital's stock has risen just 5% so far this year, lagging behind broader market indices and Bitcoin’s gains of 112%.