DeFi
Fintech company DeFi Technologies shares surge after new acquisition — – 10.07.2024
DeFi Technologies to Acquire Stillman Digital / Photo: shutterstock
Quotes on fintech company DeFi Technologies stock pink more than 3% on Tuesday, July 9. The gains followed the company’s announcement that it had agreed to acquire Stillman Digital, a crypto asset over-the-counter (OTC) trading platform and liquidity provider.
Details
DeFi Technologies stock rose 3.25% to $1.27 per share in OTC trading Tuesday. It is up more than 150% year-to-date and 1,530% over the past 12 months.
On Tuesday, DeFi announced that it had sign a letter of intent to acquire two legal entities from Stillman Digital, a cryptocurrency trading desk and a liquidity provider. A liquidity provider is an intermediary that holds assets and, in exchange for a reward, provides exchanges with cryptocurrencies to execute orders.
About the Agreement and Participants
Stillman Digital was founded in 2021. Since then, it has facilitated over $15 billion in trading volume, according to DeFi Technologies’ press release. Its clients, such as declared Stillman’s website serves individuals, digital asset miners, retailers, family offices, and hedge funds. Trades can be made via chat, phone, and Stillman’s interface. Revenue is generated by the spread between the client’s price and the potential hedge price. In the first quarter of 2024, the company reported revenue of CAD$8.35 million ($6.1 million).
DeFi Technologies expects the Stillman acquisition to expand its trading capabilities, diversify its customer base, and stabilize its revenue streams, it noted. Currently, DeFi operates multiple lines of business through its subsidiaries. One of them, Valour, issues exchange-traded products (ETPs) that allow retail and institutional investors to access digital assets, such as Bitcoin, through their traditional bank accounts. As of May 31, Valour’s total assets under management (AUM) stood at CAD$837 million (approximately USD$610 million), up nearly 65% from a year earlier. Another DeFi unit, DeFi Alpha, aims to identify low-risk arbitrage opportunities within the crypto ecosystem. Crypto arbitrage involves operator price differences of digital assets on different markets or exchanges.
Additionally, Stillman plans to expand into new business segments, including custody and foreign exchange, which are expected to drive future growth, DeFi said.
Under the agreement, DeFi Technologies will acquire Stillman’s securities in exchange for 2.5 million shares of DeFi stock.
Analyst outlook
As of mid-May, Zacks Small Cap Research released a report on DeFi Technologies titled “Underappreciated Earnings Power,” suggesting that the company’s asset growth will depend on Bitcoin’s price dynamics: if the cryptocurrency reaches $100,000 per coin, the company’s stock is expected to exceed $7 per share.