Digiliti Money Group Inc (NASDAQ:DGLT): Here's What's Happening

Digiliti Money Group Inc (NASDAQ:DGLT) is on fire this week. Well, more accurately, during the latter half of this week. At its Tuesday close, the company traded for less than $0.20 a share. By midday on Wednesday, this had risen to $1.05 a piece – a more than 160% appreciation in a matter of hours – and the company was halted by NASDAQ. We don't have much information from the exchange as to why the halt is in place (although it's not surprising, given the run) with the company only saying that trading was halted for "additional information requested".So what's behind the run?Ahead of the bell on Wednesday, a number of reports hit press that a company was pitching to acquire Digiliti. Here's one. Here's another. The validity of the reports was initially in question, but a statement from the potential acquiring entity seems to validate the claims.For those new to Digiliti (and we wouldn’t be surprised if many reading are in this boat, this is very much an under the radar entity, or at least it was before yesterday) the company bills itself as a provider of cloud-based software-as-a-service (SaaS) financial technology (fintech) solutions to the financial services industry in the United States. We've said it before when looking at these sorts of technology type, software stocks – the jargon that pops up in the operational blurb can often be misleading for anyone not familiar with industry terms. In this instance, it looks as though the company's primary product is something called Select Mobile Money, a prepaid mobile money platform that links various mobile banking features with a prepaid debit card issued by financial institutions.The last few months have been pretty rough for Digiliti shareholders, with the company delaying earnings, reporting weakening revenues and having to appoint an interim CEO to take the place of the guy that was previously at the helm. Share price is down more than 70% on the 2017 open and – for all intents and purposes – the stock looked like it was in trouble.Then came the latest news.The entity that is reported to have made a bid for Digiliti is called Urban FT Group. It’s a SaaS-based white label digital banking app company, so the two company are basically operating in exactly the same market, and while we don't have any information on the terms of the agreement as yet, Urban is reportedly willing to pay all cash for Digiliti.Our guess is this: Urban is interested more in Digiliti's client base than it is interested in the company's technology. It's seen Digiliti struggling and thought that now might be an ideal time to swoop in and pick up the company's assets (client list) cheap before anybody else does. Before the latest run, Digiliti was valued at less than $2.2 million. For a suite of technology and a client base that looks to fit perfectly with Urban's, that's not a bad deal.Of course, what Urban will eventually pay remains to be seen. The latest run values Digiliti at a little over $10 million. There's a decent chance that the former will be willing to pay a substantial premium to share price, so now it's all about how high this premium is and whether it builds on the current $1.08 bid.We're going to go out on a limb and say that this one might well be worth a short term punt, but a smart play would probably be to wait until the company dips once trading resumes. We'll almost certainly see a dip as the shorter term operators pull profits off the table and the lower the stock is pushed during this correction, the more upside is available to anyone willing to take on the risk of said quick turnaround punt.We're going to keep on top of this one and we'll update as appropriate.We will be updating our subscribers as soon as we know more. For the latest updates on DGLT, sign up below!Image courtesy of Nakashi via FlickrDisclosure: We have no position in DGLT and have not been compensated for this article.