What Does The Latest Update Mean For MGT Capital Investments Inc (OTCMKTS:MGTI)

MGT Capital Investments Inc. (OTCMKTS:MGTI) is a company we've followed pretty closely over the last twelve months. It's been a bit of a wild ride (we'd expect nothing less from McAfee), but the general tone of our coverage has been one of optimism. Basically, we like what he (and MGT) is trying to achieve, and we think if there's anyone likely to succeed in doing what he's doing, it's McAfee. Sure, there are those that will point to his various indiscretions, and the potentially shady (and now very well documented, be the documentation a correct representation or not) last decade or two, as a major risk factor associated with any company he's heading up. And that's reasonable. We've sat in on a large number of the calls, conferences and events he's attended since taking over at MGT, however, and whatever opinions people have of the guy, he's incredibly knowledgeable about what he does, and about the forward world in which he's trying to establish MGT as an industry leader.For us, and to date, the bumps in the road have been worth bearing in the sense that, as a relatively speculative punt, there's credence to piggybacking McAfee as he tries to navigate the various pitfalls of cyber tech startup (something which, of course, he's done incredibly successfully in the past).In contrast to our optimism, however, the company hasn’t fared too well this year. We’ve seen a few nice runs (March highs at $1.25 and January highs at just shy of that), but these runs have quickly turned around, and MGT has spent most of its time in the sub dollar region.Right now, the company trades for a little over $0.71 – 43% off 2017 highs and at the low end of the 52-week range – and McAfee himself just put out a release (and an accompanying video, recorded in what looks like a hotel room) detailing the current status of MGT's three lead operational arms.We've covered the bitcoin aspect of the business on a number of occasions, and we didn’t get much in the way of fresh information there, so we'll skip it for the purposes of this discussion. The other two aspects, however, the Sentinel system and the MGT Secure Phone, are worth touching on, and then we'll use this fresh insight to update our bias.So, Sentinel. This is the big one. Basically, the Sentinel system is a security console that alerts a network admin to any discrepancies in traffic (which would be indicative of a malicious threat). This was set for release commercially last October, but that never materialized. In the latest update, McAfee explains why. Basically, he got it to a point at which he thought it was impenetrable, handed it over to a team of hackers, and they proved it wasn’t. He then brought the hackers that broke it on board, and had them fix it. The one named is a guy called Chris Roberts, who's now on board as the company's Chief Technology Officer. Roberts is a pretty interesting guy (he's the one who claimed to have hacked the ISS, and a commercial aircraft) and the word from McAfee is that he and Roberts have now got the Sentinel system ready to go.Looking at the Secure Phone, McAfee reiterated that there's a 160K initial order in the works, and that it's going to be a big revenue driver (and a profitable one, at that) as and when these phones hit shelves. We looked at this recently in light of the Nordic announcement, so readers looking to catch up might want to catch up here.So what's our take?Well, earnings are about to hit press, and there's some suggestion that this update might be an attempt to soften up shareholders before earnings disappoints. This is possible, and if true, we may see a dip as earnings come out.Longer term, however, we're still bullish on this one. If Sentinel and the Phone hit shelves late 2017 early 2018, there's plenty of room for appreciation at current price, and this means any dip post-earnings might be a nice opportunity to pick up an exposure to long term growth at a discount.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.