MGT Capital Investments Inc. (OTCMKTS:MGTI) Finally Offers Clarity, Strengthens Investment Thesis

MGT Capital Investments Inc. (OTCMKTS:MGTI) has been one of the most talked about tech stocks of 2016 so far, and it doesn’t look like it's going to slow down as the year draws to a close and 2017 rolls around. The company just announced it has finally appointed John McAfee as CEO, and gave us an update as to what's going on behind the curtain. Here's what's important, and what it all means going forward.First, a brief recap as to what's gone on to date.MGT is pitching to become a cyber security industry leader, with McAfee at the helm. Over the last six months or so, it has undergone a pretty much complete pivot from its legacy online gaming operations, and by way of various acquisitions and personnel hires, has brought (or is attempting to bring) to market a host of cyber security products, designed to improve upon, and is some cases, completely re-imagine, the currently available standards in their respective spaces. MGT also got a bitcoin mining operation under way during the third quarter – something we'll get to in a little more detail shortly.So, the CEO position.McAfee taking over as CEO is something that has been on the cards since the pivot kicked off, but which for various reasons was delayed until now. The major delay came when NYSE refused to allow registration of the shares that the company planned to issue as part of his appointment, but a subsequent delisting (which allowed the company to issue without NYSE's approval) resolved the issue. This appointment is a positive development for shareholders, and until now McAfee's interests in the company hadn’t been formalized. This formalization aligns McAfee with shareholders formally, and as we've said in the past, whatever wider markets think of him, we'd bet on McAfee adding value to the company.The business update covered a couple of key developments.The first is the above mentioned bitcoin mining operations. These operations are working to provide a steady stream of revenues for MGT, to the tune of more than $100,000 per month right now, and set to increase as processing power ramps up. This follows a recent LOI that outlined a planned partnership between MGT and Bitmain, an agreement under which McAfee is set to brand his own bitcoin mining pool with the support and infrastructure of Bitmain.The second update relates to Sentinel, something we looked into in detail last month. Sentinel is a security device designed to replace the current standard in network security, and according to the recent release, shipping will start in the coming weeks. This is pretty vague, but we're not reading into this too much. Over the last few months, MGT has tended towards vagueness with its releases, and in doing so has kept everyone guessing, and then hit markets with an update. We expect the same to happen with Sentinel.Perhaps most importantly, the company just filed a 10-Q with the SEC, and we can use this to get a picture of its financial standing – something that has generated a lot of uncertainty over the past few months.Revenues for the three months ended September 30 derived solely from bitcoin mining, and totaled $53,000. As mentioned, this should have increased to around $300,000 for the fourth quarter, but we'll have to wait for the next report for confirmation. Cost of this revenue (read: the electricity used to run the mining consoles) came in at a little over $31,000.Net loss hit a little over $10.8 million, driven primarily by gen and admin. Not great, but as the bitcoin revenues ramp up, and if the Sentinel sales start coming in, we should see this offset going forward. Cash on hand sits at a little over $2 million, which again isn’t great, but assets outweigh liabilities by more than two to one, offering a bit of reprieve on sentiment.Bottom line here is that the updates have formalized operations, and that's been a major detracting fact over the past couple of quarters from a value perspective. With a 10-Q in place, and the CEO position finally filled, MGT can start to push forward with its operational strategy without the weight of uncertainty that has put pressure on its market cap as late.Check out the 10-Q here. We will be updating our subscribers as soon as we know more. For the latest updates on MGTI, sign up below!Disclosure: We have no position in MGTI and have not been compensated for this article.