DPW Holdings Inc (NYSEAMERICAN: DPW) is climbing in the market this morning, and for good reason. The company announced that it is planning on a Regulation A offering that will drive much needed funding through the door. Today, we’ll talk about:
- The offering;
- what we’re seeing from DPW stock as a result; and
- what we’ll be watching for ahead.
DPW Announces Regulation A Offering
As mentioned above, DPW Holdings is having a strong start to the trading session this morning after announcing that it intends to reaise capital. The announcement came by way of press release early this morning.
In the release, the company said that it anticipates offering 3-year non-convertible promissory notes in an effort to raise capital. The capital raised will be used for various purposes, including funding of a variety of loans through its wholly owned subsidiary, Digital Power Lending.
DPW said that the notes are expected to accrue annualized interesst of between 5% and 15% that will be paid at a monthly rate and will be offered on a continuous basis. The company also said that the notes will be made available only at an online property operated by Digital Power Lending, known as www.monthlyinterest.com.
Outside of lending, DPW said that net proceeds will be used to fund the expansion of Digital Farms as well as fund the acquisition of equity in other companies. Funds may also be used for the repayment of debt, to repurchase shares of common stock and an estimated 5% will be used for general corporate purposes.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to DPW Holdings, the news proved to be overwhelmingly positive.
Through this capital raise vehicle, the comapny will not be diluting shares to get its hands on the money it needs. Without dilution and with funds that will likely bulster the company’s balance sheet, excited investors are pushing the stock on a run for the top.
As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. currently (9:44), DPW is trading at $0.22 per share after a gain of $0.035 per share or 19.51% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on DPW. In particular, we’re interested in following the offering and the use of capital raised through it. Nonetheless, we’ll keep a close eye on the news and bring it to you as it breaks!
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