DigitalTown, Inc. (OTCMKTS: DGTW) has embarked on a restructuring drive as it seeks to reinvigorate its ailing growth prospects after years of underperformance. The Company has confirmed management changes as part of the restructuring drive.
DigitalTown Price Action Analysis
Confirmation that the Company is planning to clean up it is the balance sheet as well as pursue new avenues for guaranteeing continuity of the business are the latest catalysts fuelling the stock’s upside action.
While the stock is still languishing at all-time lows, engulfed in a long-term bear trend, it has started showing signs of bottoming out. The confirmation of the restructuring drive has already triggered a 170% spike in share price from all-time lows. Market activity has also improved, depicted by a spike in trading volumes alluding to renewed investor interest.
After shedding more than 90% in market value over the past year, DigitalTown faces an uphill task to turn bullish. For starters, the stock will have to rally and takeout the $0.01 resistance level. It is above the $0.01 technical level that the stock would emerge as break out play.
Below the critical technical level, the stock remains bearish and likely to continue edging lower as short sellers remain in firm control.
DigitalTown is a diversified holding company with operations around FinTech, Smart Cities as well as Blockchain technology. The Company is currently harnessing blockchain technology to ensure a secure distributed internet for delivering a secure localized commerce platform.
DigitalTown Restructuring Drive
DigitalTown rallying by more than 170% came on the confirmation of management changes as the Company seeks to revitalize its prospects. Sam Ciacco has since taken over as the CEO and Chairman of the board; Keven Wilson steps in as the Chief Financial Officer.
Ciacco joins the Company as a respected industry professional with a proven record on implementing structure and discipline. Wilson, on the other hand, joins the Company with almost four decades worth of finance leadership and entrepreneurial experience.
The appointment comes at a time when DigitalTown is trying to reinvigorate its ailing prospects. The initial focus as part of the changes is to ensure that the Company remains afloat and is SEC complaint. In addition, the two executives will have to clean the Company’s balance sheet and formulate new ideas that have the potential to guarantee business continuity.
“I’m sure that shareholders will greatly appreciate their efforts to get the Company back on the right track with a healthy balance sheet and profitability. Sam and Kevin’s plans, I am sure, are achievable’ and will return the Company to a condition of thriving rather than surviving. I wish them much success,” stated Darv Habben, former Chairman.
DigitalTown Blockchain Ambition
The restructuring drive comes on the heels of DigitalTown announcing product changes late last year as part of an effort of making it easy for people to find and buy from local businesses. Changes to the Company’s blockchain based platform as a Service technology resulted in the introduction of search and pay functionalities that allow people to search and pay for local businesses using the free SmartWallet.
The Company provides a free online directory listing regardless of size or type of business. The SmartWallet on offer allows merchants to save money on every transaction in addition to standing a chance of earning Community Points on using the wallet
“Our experience to date has shown us that while the market responded favorably to the ambitious DigitalTown vision of supporting local communities and keeping business local, our product range was too broad. We are now focusing on local search and Smart Wallet payments, initially in Austin, where a growing number of businesses are registering to take advantage of the free directory listing,” stated former CEO George Nagy.
DigitalTown faces an uphill task to turn bullish after taking a significant hit over the past few years. Considering the underlying long-term bear trend, the Company will have to serve groundbreaking catalysts to sustain the recent spike.
The Confirmation of a restructuring drive is a development that looks set to continue propping up market sentiments. However, investors must start seeing substantial changes when it comes to operational efficiency as well as core business development for the stock to continue bottoming out.
That said it might be wise to wait for further confirmation, which could be in the form of the stock taking-out the $0.01 technical level to confirm a trend change.
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Disclosure: We have no position in DGTW and have not been compensated for this article.