DigiMax Stock and the Financial World
If you had bought Digimax Stock (DIGI.CN) a year ago, you would have enjoyed a nice 400% return. Indeed its technology providing advanced financial, predictive, and cryptocurrency solutions across various industries and verticals could be very helpful in the future, for retailers as for hedge funds. Here is why DigiMax could become bigger in the future.
The Cryptocurrency Market keeps evolving.
The total crypto market is worth around USD2$ trillion and it coul be worth $15 trillion by 2030. In comparison, the TSX and TSXV is worth $3.3 trillion. It is over the days when cryptocurrencies were considered as a speculation where users would just bet or gamble on it, pictured with the famous Dogecoin (the meme crypto) backed by Elon Musk. Now, banks, hedge funds are involved in it. For example, NVIDIA Corporation had 88 hedge funds involved in the company ( end of the fourth quarter of 2020).
Also, shootout to Tesla and once again who, back then bought $1B worth of bitcoin and would allow bitcoin for payment for Tesla vehicle sales.
The crypto market also influences the stock market. It starts with all the crypto mining companies (HIVE,CSTR,DMGI…), with Bitfarm being the first mining company to be traded on Nasdaq to the exchange platform Coinbase which its net worth is USD$56.57B.
Now a new technology is developed to buy and sell crypto at the right time, and it is as simple as 2 words: AI. Robots are trained to see patterns, volume and pressure to automatically use these data to interact in the crypto industry.
Artificial Intelligence = Profit
Digimax’s technology uses millions of data points per hour to spot relevant patterns, make decisions and generate accurate price trend predictions for our customers which is set by there data scientists. It is a lucrative place as acoording to a 2019 survey, 37% of organizations were using AI, a number that grew by 270% between 2015 and 2019. But it’s not all. The AI industry has a five-year CAGR expected to be 18.4% with revenues reaching $37.9 billion by 2024.
They sell their SAAS (software as a service) where it includes a crypto price prediction application via a monthly subscription which is CryptoHawk ,a multitask platform. Its capabilities include:
- Alert’s investors over SMS and Email;
- Algorithm covers ETH and BTC;
- Planned expansion of algo to ADA,DOT, XRP.
With this platform, they have a total addressable market of 64 million crypto investors and a mobile app should be launched by Q3 2021. It is a $29.99 per month subscription .
Digimax also acquired a 15% stake in Kirobo. Kirobo has developed solutions to certain issues associated with crypto transactions, which include the ability to cancel a transfer if funds are sent to the wrong address, the password protection of transactions, and certain benefits of centralized finance. Chief among those benefits are added security layers that can be added by intermediaries such as credit card companies.
And last but not the least, let’s highlight the launch of their hedge fund. Seneca House is the registered Portfolio Manager and owns 20% of the Fund with DigiMax owning the remaining 80%.
Let's talk about financials
Digimax has a strong cash balance with the $18,000,000 raised in Q1 in Q1, including investment from H.C. Wainwright. According to their last earning report, the total cash balance was $ 18,543,528 $ in April 30th. Still from their last report, they have $23,183,297 in total assets and $23,183,297 in Total Liabilities and Shareholders’ Equity. It is normal to see liabilities as crypto companies intend to evolve the fastest as possible to take the biggest the can in this sector. If we compare it to the Price per share, it currently represents a $0.01 Loss per share from continuing operations – basic and diluted shares. But these numbers should and will be improved. For Q3, we will see:
Announcement of new collaboration partners for CryptoHawk;
Introduction of a new Artificial Intelligence based subscription service outside of crypto currencies for both retail and institutional investors.
Moreover, DIGI is experiencing consistent growth in corporate and SAAS clients around the world and is investing in sales and marketing to spur growth.
Now let’s focus about the Stock Price. The current SP is traded at CAD$.20 for a current market cap of $50.67M. The Price/Sales ratio could seem high (100) but is is normal for crypto companies as the sector evolves on an exponentially way and most importantly, the market evolves fast. In comparison:
- CSTR’s P/S ratio is at 96.35;
- NDA’s P/S ratio is at 511;
- BIGG’s P/S ratio is at 30.
The total number of outstanding shares is worth 266.68M and 4.28% is held by insiders. It’s pretty consequent but with the current stock price, the significant progresses and the good volume (1,165,728) can change the SP quickly.
The company has 11,095,833 exercisable options and have 75,586,249 warrant left. So we could face more dilution which would mean could loosen the SP’s growth.
As a conclusion, despite an important number of outstanding shares and possible dilution because of stock options and warrants, the company offers a great products and has several pipelines for the future. The competition is harsh in this sector but the leadership team is experienced and will know how to lead the company.
This article solely expresses the opinion of the writer which might be disagreeing with the other writers of Money,eh?
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