U.S. Global Investors, Inc. (NASDAQ: GROW) (the “Company”), a
boutique registered investment advisory firm with longstanding
experience in global markets and specialized sectors, is pleased to
announce that it has recently sold 10 million shares of HIVE
Blockchain Technologies (TSX.V:HIVE) (OTCQX:HVBTF) (“HIVE”),
locking in substantial gains. HIVE is the world’s first
publicly-traded firm involved in the business of mining new
cryptocurrencies. The Company also announces that it plans to
reinvest the proceeds from the sale back into HIVE via a private
placement of unsecured convertible debentures, subject to
regulatory approval by the TSX Venture Exchange.
HIVE Shares Sold by U.S. Global Investors
Frank Holmes, the Company CEO and Interim Executive Chairman of
HIVE, comments: “U.S. Global Investors has recently sold shares of
HIVE with the goal of redeploying capital back into HIVE. No shares
have been sold by me personally, despite reports to the contrary.
My personal ownership of HIVE stock is completely separate from the
Company’s, and any reports that suggest I sold my holdings were
made erroneously. I continue to believe strongly in the long-term
vision of HIVE, and I’m excited to remain a part of its unique
story.
“By repositioning our investment in HIVE, we seek to continue
participating in the crypto-mining ecosystem while lowering much of
the volatility of our investment portfolio. Two years ago, a change
was made to how we record unrealized gains and losses of certain
corporate investments, such that our equity position in HIVE often
swung our net income dramatically quarter-to-quarter. Obviously
debt securities such as convertible debentures come with their own
risks, but historically they’ve been less volatile than stocks.
“It’s important for investors and traders to manage their
expectations, as every asset class has its own DNA of volatility.
Bitcoin and Ethereum are extremely volatile, which is reflected in
HIVE’s stock price since it mines both coins. HIVE is the most
liquid crypto-mining stock, and yet it’s still more volatile than a
highly disruptive mega-cap stock like Tesla.”
Redeploying Capital Back Into HIVE
The Company locked in gains of approximately $18 million after
selling the 10 million shares of HIVE. Fifteen million dollars of
this is expected to be put toward the private placement, if
approved by regulators.
The debentures are expected to mature 60 months following the
date of issuance, bearing interest at a rate of 8% per year, paid
monthly. They are also expected to be issued at par, with each one
being redeemable by HIVE at any time, and convertible at the option
of the Company into common shares in the capital of HIVE at a
conversion price of C$3.00 per share.
In addition, the Company is expected to be issued 5 million
common share purchase warrants. Each whole warrant should entitle
the Company to acquire one common share in HIVE at a price of
C$3.00 for a period of three years from closing.
“This transaction could be a win-win for the Company as well as
HIVE,” Mr. Holmes says. “HIVE would be given working capital to
enhance liquidity and maintain momentum in acquiring
application-specific integrated circuit (ASIC) chips while
upgrading and expanding its graphics processing unit (GPU) chip
production to mine Ethereum, while the Company would receive a
convertible debt instrument yielding 8%. We anticipate the
financing to be completed without the usual 6% broker fees, and the
cost of capital for HIVE is much less than the 16% cost of capital
associated with leasing equipment for crypto mining.
“All publicly-traded crypto-mining firms have increased by
triple digits or more this year, but only HIVE mines Ethereum and
Bitcoin, both of which had a phenomenal fourth quarter and 2020. In
this high-price environment, many crypto miners, HIVE included,
have been expanding their operations, a positive sign of what’s to
come.
“HIVE’s daily trading volume has increased substantially in
2020, making it an attractive crypto stock for investors who also
favor liquidity. In December 2020, through the 29th, HIVE traded
more than 302 million shares, almost 30% more than the previous
month and 678% more than the same month a year earlier. For the
year through December 29, HIVE traded a total of 1.7 billion
shares. In Canada alone. HIVE trades in three countries and has
traded over 2 billion shares this year.”
####
About U.S. Global Investors, Inc.
The story of U.S. Global Investors goes back more than 50 years
when it began as an investment club. Today, U.S. Global Investors,
Inc. (www.usfunds.com) is a registered investment adviser that
focuses on niche markets around the world. Headquartered in San
Antonio, Texas, the Company provides money management and other
services to U.S. Global Investors Funds and U.S. Global ETFs.
About HIVE Blockchain Technologies, Ltd.
HIVE Blockchain Technologies Ltd. is a growth oriented,
TSX.V-listed company building a bridge from the blockchain sector
to traditional capital markets. HIVE owns state-of-the-art green
energy-powered data center facilities in Canada, Sweden and Iceland
which produce newly minted digital currencies like Bitcoin and
Ethereum continuously on the cloud. Its deployments provide
shareholders with exposure to the operating margins of digital
currency mining as well as a portfolio of crypto-coins.
Frank Holmes has been appointed non-executive chairman of the
Board of Directors of HIVE Blockchain Technologies. Both Mr. Holmes
and U.S. Global Investors own shares of HIVE. Effective 8/31/2018,
Frank Holmes serves as the interim executive chairman of HIVE.
The S&P 500 Stock Index is a widely recognized
capitalization-weighted index of 500 common stock prices in U.S.
companies.
Standard deviation is a measure of the dispersion of a set of
data from its mean. The more spread apart the data, the higher the
deviation. Standard deviation is also known as historical
volatility.
Holdings may change daily. Holdings are reported as of the most
recent quarter-end. The following securities mentioned in the press
release were held by one or more accounts managed by U.S. Global
Investors as of 9/30/2020: Tesla, Inc.
Holly Schoenfeldt
U.S. Global Investors, Inc.
2103081268
hschoenfeldt@usfunds.com
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