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FRMO Corporation (PNK:FRMO) Q2 2024 Earnings Call Transcript

FRMO Corporation (PNK:FRMO) Q2 2024 Earnings Call Transcript January 16, 2024

FRMO Corporation isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Therese Byars: Good afternoon, everyone. This is Therese Byars speaking, and I'm the Corporate Secretary of FRMO Corp. Thank you for joining us on this call. The statements made on this call apply only as of today. The information on this call should not be construed to be a recommendation to purchase or sell any particular security or investment fund. The opinions referenced on this call today are not intended to be a forecast of future events or a guarantee of future results. It should not be assumed that any of the security transactions referenced today have been or will prove to be profitable, or that future investment decisions will be profitable or will equal or exceed the past performance of the investments. For additional information, you may visit the FRMO website at frmocorp.com.

Today's discussion will be led by Murray Stahl, Chairman and Chief Executive Officer. He will review key points related to the 2024 second quarter earnings. A replay for this call will be available on the FRMO website until the summary transcript is posted. And now I'll turn it over to Mr. Stahl.

A close-up of a financial chart with complex data points.
A close-up of a financial chart with complex data points.

Murray Stahl: Okay. Thanks, Therese, and thanks, everybody, for joining us. I'll just go right into it. This quarter, I would argue was a milestone quarter for us. The reason I say it was a milestone quarter for us is, you'll observe that our biggest position, TPL, was actually down for the quarter, and you can see the line of unrealized losses. Of course, that's on all our realized losses because we're consolidating HK Hard Assets, but it was down, however, it was more than balanced by two other positions. And the first one was Winland, formerly known as Winland Electronics, now we call Winland Holdings, which is where we've been doing a lot of our cryptocurrency mining work, and you might observe if you line up all the quarterly financial statements.

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And then you'll see we're gradually increasing our position in. And as of quarter-end, I think you can look it up on the on the summary page on the website, but I think we're up to 1,593,000 shares, roughly, and we bought more subsequently. So I think we're around 35% of Winland. More about that in a minute. And then the other position or the other positions is the various ways we express ownership of bitcoin directly, not the least of which, actually most important of which is the Bitcoin Investment Trust, GBTC. So this was the first quarter that the crypto earnings actually outweighed TPL. And incidentally, we increased our exposure to every one of our holdings. We might also remark that despite all of that the investing, and you can see how much money we spent, we increased our cash balance, not decreased our cash balance relative to fiscal year-end.

So - and our own shareholders, not the consolidated shareholders, that we were consolidate - that were noncontrolling interest in the HK Hard Assets, but our own equity interest now exceeds $206 million. So there's a substantial investment here with substantial liquidity and we expand in crypto little by little every quarter. So maybe the first thing I should tell you is why do we expand little by little every quarter when no one else seems to do that. And I know it might be excruciating to watch, but it's necessary to do it that way. The reason it's necessary to do it that way is because of two factors in the world of mining, the one is, that no matter what point in the cycle you are, this is a cycle, of course, relative to the having in bitcoin, you're always every passing day you're approaching yet another halving.

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To continue reading the Q&A session, please click here.