DPW Holdings Inc (NYSEAMERICAN: DPW) is having an incredibly strong start to the trading session this morning, and for good reason. The company announced that it would be pursuing a spinoff of its crypto mining business, exciting investors and sending the stock on a run for the top. Today, we’ll talk about:
- The spinoff;
- what we’re seeing from DPW stock as a result; and
- what we’ll be watching for ahead.
DPW Announces Super Crypto Mining Spinoff Plans
As mentioned above, DPW Holdings is having a strong start to the trading session this morning after announcing spinoff news. In a press release issued this morning, the company said that the Board of Directors has authorized the officers of DPW to pursue the spinoff of Super Crypto Mining, Inc.
In the release, the company said that its action demonstrates confidence in the long-term viability of crypto-mining and the cryptocurrency marketplace. The spinoff will provide Super Crypto’s management team the tools and independence necessary to achieve and surpass its goals for 2019 and beyond.
When the spinoff takes place, current holders of DPW common stock will be distributed new shares of Super Crypto stock. The date of this distribution is to be determined once a registration statement and Form 10 has been declared effective by the SEC. In the release, DPW provided several examples of how the spinoff will benefit shareholders, including:
- Allowing management teams to focus on their respective businesses
- Allow investors, institutions and others interested in the cryptocurrency space to increase their positions in Super Crypto Mining as a standalone business.
- Provide Super Crypto Mining with a new board of directors whose members should bring more expertise in the cryptocurrency sector.
- Super Crypto will be able to use its shares as currency to pursue a variety of objectives that are not presently available with DPW owning all of the shares of capital stock.
In a statement, Milton “Todd” Ault, III, CEO and Chairman at DPW, had the following to offer:
As stated during our investor conference call on December 20, 2017, the acquisition of assets that would appreciate under our ownership and the creation of increased shareholder value through our portfolio companies and projects was our top priority. By spinning off our cryptocurrency assets, we are separating disparate businesses and providing the opportunity to hold stock in a pureplay crypto company. We are confident crypto-mining and the cryptocurrency marketplace will flourish in the long term and think there is significant value in Super Crypto and its various initiatives which require the ability to finance their growth independently. Regardless of the current downturn in the cryptocurrency space, we believe the assets of Super Crypto will be able to serve as the foundation of an independent company with the ability to raise its own capital. Further, this transaction positions Super Crypto Mining for a bitcoin recovery. It is our intent to declare a special dividend of no less than 80% of the common stock of Super Crypto to DPW stockholders.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of DPW, the news proved to be overwhelmingly positive. After all, with cryptocurrencies continuing to lose value, DPW’s separation of Super Crypto Mining from its core business is a strong move. At the same time, the move comes with various benefits to those interested in both, the core company and Super Crypto. So, it’s not surprising that investors are excited and the stock is making its way for the top. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:55), DPW is trading at $0.28 per share after a gain of $0.042 per share or 17.86% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on DPW. In particular, we’re interested in following the news surrounding the spinoff as well as the company’s work to grow its core defense and industrial business. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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