What happened
Shares of Sphere 3D (ANY +1.43%) dropped as much as 17.2% on Tuesday after releasing its earnings for the third quarter. The stock of the data management company that is pivoting to cryptocurrency mining was down 13.5% as of 11:46 a.m. EST today.
So what
On Nov. 15, Sphere 3D released its earnings results for the three months ending in September of this year. Revenue in the period was $1 million, up from $900,000 a year ago. Net loss was $2.4 million, worse than the $1.2 million loss last year, while gross profit actually declined year over year in the quarter. These lackluster results are likely why investors sold off Sphere 3D stock after the report came out.
Image source: Getty Images.
While Sphere 3D's legacy business is data management solutions, the company is pivoting hard into cryptocurrency mining. Specifically, it has purchased 60,000 Bitcoin (BTC +0.17%) mining machines that are supposed to start shipping next week. The company is also trying to merge with another cryptocurrency company, Gryphon Digital Mining, as Sphere 3D goes headfirst into the cryptocurrency world.
Now what
Sphere 3D's market cap of $344 million and only $1 million in revenue this month mean that investors need to be very confident in the company's cryptocurrency ambitions to own the stock at these prices. If it isn't successful and/or cryptocurrency prices drop significantly, the stock could fall a lot further than 13.5%.
