Many seem to be now discovering the opportunity that represents the cryptocurrency industry as well as its current growth. A lot of players in other sectors want to be part of this new revolution.
An excellent question that they are trying to answer is how to achieve the level of knowledge of those who commenced developing blockchain software a few years ago.
Leading business executives know very well that they need to move quickly to acquire new know-how instead of innovating in-house. As a result, the amount of acquisitions of companies operating in the sector has spiked since 2010.
If this business rationale has drawn your attention, you will appreciate Premier Products Group Inc (OTCMKTS:PMPG). This operator from the state of Montana specialized in acquiring disruptive technology companies, recently announced that it had signed a Letter of Intent to purchase a crypto mining company with existing mining rigs and operations in multiple currencies.
We believe that it is an opportunistic acquisition since they will get the hard work done, but we admit that it is also quite smart acquisition.
The market is with us and has pushed up the share price from below $0.01 to more than $0.03 in less than two months. Furthermore, the trading volume generated by this news has been astonishing. Many markets seem to believe that the potential growth of the company has increased.
Have a look at it before we provide more details:
The 1-year chart for PMPG
Terminating previous businesses and entering the cryptocurrency sector
This company was incorporated in 2004 in Wyoming and is currently headquartered in Missoula, Montana. It recently released the termination of its contract with its previous business affiliate, SATIC Incorporated. Instead, the company seems to be betting on the high growth cryptocurrency sector. Read the following carefully.
On January 5, 2018, it was intimated that PMPG had signed an LOI to purchase a company with "extensive management strength in blockchain, cryptocurrency, and financial management." Both companies were said to be executing due diligence, and the transaction is expected to close in January 2018.
The fact that the company told when is the company expected to close is very positive for market participants. We will need to be alert around the end of January since if the closing is confirmed, the share price could spike up.
Why?
The new transaction does not only mean that PMPG will acquire the know-how accumulated, but it will also receive new assets. The net asset per share could increase, and the risk of shareholders and debtholders should diminish. Also, PMPG could gain a network of contacts operating in the cryptocurrency industry, which should help PMPG grow opportunities at a faster rate. To sum up, closing this transaction should be a catalyst for the stock price.
The required financial filings will be submitted
We believe that there is another significant reason to follow the stock closely. The company has many financial filings that are missing, consequently, many market participants may not be assessing the company.
Additionally, we celebrate that it was also noted in January that PMPG is working on completing audit work on the 10-K before execution:
"The Company will be filing updates with the SEC and OTC Markets in the days and weeks to come and we are confident on the timing of events." Source
Thus, we encourage the readers to check out the next annual report that will be received soon. We expect that it will contain the number of assets standing on the balance sheet before the acquisition. The information will be very important since we will be able to compare it with the new financial statements after the transaction closes. A significant increase in the number of assets and revenues will naturally be appreciated by the market.
Low Float runner
For those who may not understand the amount of volatility in the market, we need to note the following statistics. There are 239,211,936 outstanding shares and a float of only 124,924,955 shares. This means that the amount of shares owned by the public is meager, and the order book should be quite empty. As a result, market orders when good news arrives can move the share price quite a bit.
Conclusion
Currently trading with a market cap of $7 million, PMPG is an exciting story among small caps. With only $84 in cash and quite a bit of liabilities, we believe that the transaction is the best opportunity for the company to recapitalize the balance sheet. That's the reason for which the market pushed up the share price when it got noticed. Be sure to note that if the acquisition does not close, the share price will go back down again.
To sum up, this is a company to follow closely and a potential adrenaline ride for those who enjoy volatility games in the market.
We will be updating our subscribers as soon as we know more. For the latest updates on PMPG, sign up below!
Disclosure: We have no position in PMPG and have not been compensated for this article.Image courtesy of Marco Ahtisaari via Flickr
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