We establish our thesis that RIOT's growth and operations are sustained through dilution, which saw a 40% increase in shares outstanding since 2021Q1.RIOT is on the verge of a vicious cycle of selling more Bitcoins and shares for less cash, citing more severe dilution ahead.Upcoming Q2 cost structure (excluding stock-based compensation) should align with 2021Q3, 2021Q4, and 2022Q1 figures, anchoring all-in business cost per BTC near $30,000.Q2 cash position should also remain relatively unchanged considering Bitcoins mined were sold and should be sufficient to cover business expenses.Deviation (for the worse) from these expectations should be followed by another round of downgrade.IntroductionA business can be funded in 2 ways: Equity or Debt. The notion of debt is a negative one because businesses risk insolvency when taking on debt. The late Peter Lynch once said:When purchasing depressed stocks in troubled companies, seek out the ones with the superior financial positions and avoid the ones with loads of bank debt. • Companies that have no debt can't go bankrupt.Riot Blockchain (RIOT) actually fits the description above. Firstly, RIOT is indeed depressed because Bitcoin and RIOT declined 70% and 90% from their respective highs. Secondly, RIOT has no debt. RIOT's total liabilities are only 10% of its total assets.Completed the first quarter of 2021 with record current assets and zero debt.Given this context (a depressed yet ...
