The company I selected to investigate is Marathon Digital Holdings,
who is often referred to as just "Marathon" for short. According to
Barron's, Marathon is a digital asset technology company who mines
cryptocurrencies; they were established in February of 2010 and
their headquarters is in Las Vegas (
Marathon Company & People,
n.d.
).
After reviewing Marathon’s Annual Report from the SEC, it was
confirmed that Marathon does use option contracts (
Marathon
Annual Report
, 2022). According to the document, Marathon mainly
uses their option contract for additional senior employee
compensation. It was stated that in July of 2019 the Company’s board
approved 275,000 shares of options to be issued for common stock
to eight employees (
Marathon Annual Report
, 2022). The options had
a five-year term with an exercise price of $2.04 and were valued
based on the Black-Scholes model (
Marathon Annual Report
, 2022).
However, in 2020 it was later decided by the Compensation
Committee to cancel all existing stock options and replace them with
restricted stock units (
Marathon Annual Report
, 2022). This
replacement converted 1,587,500 shares of stock options to
restricted stock units at a price of $0.43 per unit with a term of one
year (
Marathon Annual Report
, 2022). Due to this decision, the total
value of options outstanding and exercisable on the Annual
Statement as of December 31, 2021, was $0 (
Marathon Annual
Report
, 2022).
(
Marathon Annual Report
, 2022)
If I was a retiree from Marathon and I received stock as part of my
pension package, I would try to leverage a put option. Over the last
year, Marathon's stock price has seen a 94.9% decrease in value, and
with cryptocurrency being so volatile I would not be surprised if it
continued to decline (
Marathon Stock Price & News
, 2023). Since I
am wagering that the stock price will continue to decline, I would
consider using a put option to give me the right (but not the
obligation) to sell my stock at a pre-agreed price in case it further
plummets (Anderson, 2022). This approach would allow me to slightly
hedge my risk exposure and retain money.
References:
Anderson, S. (2022, December 19).
Prices plunging? buy a put!
Investopedia. Retrieved January 5, 2023, from
https://www.investopedia.com/articles/optioninvestor/120401.asp
Marathon Annual Report.
Inline XBRL Viewer. (2022, March 9).
Retrieved January 5, 2023, from
https://www.sec.gov/ix?doc=%2FArchives%2Fedgar%2Fdata%2F15
07605%2F000149315222006446%2Fform10-k.htm
Marathon Company & People: Mara
. Barron's. (n.d.). Retrieved
January 5, 2023, from https://www.barrons.com/market-
data/stocks/mara/company-people
Marathon Stock Price & News
. Google Finance. (2023, January 5).
Retrieved January 5, 2023, from
https://www.google.com/finance/quote/MARA:NASDAQ?sa=X&ved
=2ahUKEwiIoI_KhrL8AhUTLFkFHZ8tDQ0Q3ecFegQIIBAg
