DPW Holdings Inc (NYSEAMERICAN: DPW) is an interesting company, and with gains over 16% in the pre-market this morning, it’s catching quite a bit of attention. However, it is also one of the first companies to shift focus and move toward the cryptocurrency sector as prices of these digital assets started to explode. With the SEC warning about companies moving toward the blockchain, many are starting to call these companies scams.
While I do agree that there are plenty of companies out there that hopped on the blockchain bandwagon for the sole purpose of driving the value of their shares upward, I don’t believe that DPW is one of these companies. Today, we’ll talk about why some are concerned, why this isn’t one of those here today gone tomorrow scams, what we’re seeing from the stock today, and what we’ll be watching for ahead.
Why Some Are Worried About DPW
With the SEC warning investors about companies that are changing their names to blockchain-related names and may not have the investors’ best interest in mind in doing so, investors are wondering which of the companies working in the cryptocurrency space they can actually trust. As one of the early adopters in the cryptocurrency space, it comes to mind for many that this might be one of those scammy companies that the SEC is worried about.
After all, last year, the company announced that it had created an advanced power supply designed to supply a cryptocurrency mining machine with the power it needed to mine. Shortly after this announcement, DPW announced that it launched a subsidiary known as Super Crypto Mining. The subsidiary was developed to mine cryptocurrency, starting with 1,000 mining machines by the end of the year 2018 and mining the top 10 cryptocurrnecies on the market.
When the news was announced, the stock skyrocketed each time. This is the same type of dramatic movement that the SEC was talking about, leading to even further concerns. Nonetheless, as mentioned above I don’t believe that DPW is a company that fits into the bucket of companies changing their name for name sake and hoping for gains as a result.
Why DPW Isn’t A Concern
In my opinion, DPW isn’t one of these companies, and there are a few reasons for this:
- DPW Didn’t Just Say It Was Getting Involved – First and foremost, DPW didn’t change its name or create a subsidiary that had no direction for the sole purpose of showing the investing public that it is interested in cryptocurrency. Nope, the company has made moves in the space, investing massive amounts of money into mining equipment and showing the investing public that the company means business.
- DPW Didn’t Leave Its Business On The Table – A lot of these companies will completely restructure operations, leaving their past products and services on the table and reaching for a dream of getting involved in the blockchain. That’s not what DPW is doing by any stretch of the imagination. While the company is investing in the mining of cryptocurrency, they have not forgotten their core business. In fact, the company has seen strong growth in both commercial and defense sectors, and continues to operate these areas of its business with incredible efficacy.
- Institutional Ownership – Finally, DPW has caught the attention of several institutional investors. At the moment, there are 20 institutional investors holding the stock. These guys generally know what they’re doing. If DPW was a scam, there wouldn’t be so many investors of this caliper interested.
What We’re Seeing From The Stock
Recently, following DPW has been like following a roller coaster. The stock has seen wild swings in value as it builds a correlation to the cryptocurrency market. Nonetheless, the stock is climbing in the market today. Currently (8:53), DPW is trading at $1.14 per share after a gain of 16.33% 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 company’s progress in the crypto space as well as its continued growth in the commercial and defense arms of its business. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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