U.S. Global Investors Announces It Has Realized Substantial Gains in Its Investment Portfolio
SAN ANTONIO–December 30, 2020–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.
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.”
|Shares of HIVE Blockchain Technologies Have Been Historically Volatile
Standard Deviations for 12-Month Period Through November 30, 2020
|S&P 500 Index||±2%||±6%|
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. 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.