SummaryUnderwriting shares below market price indicate overestimation of SLNH's upside potential.SLNH risks over-centralization where 60% of mining operations will be centralized in Texas by Q4 and up to 90% in the long-run.Findings contradict SLNH's claim to have one of the industry's lowest mining costs when referring to cost of revenue (mining) and all-in business costs.Similar to MARA, SLNH is heavily burdened by preferred share commitments on top of high level of leverage.Despite SLNH's 70% decline since our previous coverage and 90% from its all-time high, we still couldn't find sufficient investment value proposition to justify an investment.IntroductionIn our previous coverage, we argued that Soluna Holdings' (SLNH) curtailed energy business model isn't sustainable due to efforts in reducing curtailed energy (SLNH's main source of income). In addition, SLNH's foreseeable capacity (Q3: 1.02 EH/s) severely lags behind the industry (Table 1). At the very least, these imply limited upside potential. At that time of writing, Soluna was trading (market cap = ~$63.5mil) above its adjusted book value ($37.15mil = $2.8mil cash + $68.245mil PP&E + $14.90 prepaid - $48.8 Total Liability), implying excessive downside risk. The combination of limited upside potential and excessive downside risk suggests that Soluna could not offer sufficient margin of safety. So far, Soluna's share price has reflected this pessimistic outlook w...
