DMG Blockchain (DMGI.V) piles on new deals in first week of public listing

It’s fairly typical for a company to sit on a business deal or two when it’s about to go public, figuring that you want to make a bang in week one and propel the share price as best you can.

But DMG Blockchain (DMGI.V) has been cranking out news like it’s going out of style.

We wrote about DMG’s dealflow mid-last week. We should have waited.

DMG BLOCKCHAIN RECEIVES SECOND ORDER IN EXCESS OF $3 MILLION FROM MAJOR JAPANESE CUSTOMER

DMG Blockchain Solutions Inc. has secured a new customer for its bitcoin hosting business, known as mining as a service (MaaS). DMG received an order in excess of $3-million from Forside Financial Services Inc., a company headquartered in Tokyo, Japan, for the hardware purchase and set-up, with monthly recurring hosting revenues to begin upon completion. Forside is a diversified technology company listed on the Jasdaq Standard of the Tokyo Stock Exchange.

To put this in perspective, Forside has a market cap equivalent to CAN $91 million. It’s no shady pretendsies company with no online presence. In fact, the company plans to set up a fintech spinout with the machines its purchasing from DMG.

Dec 27(Reuters) – Forside Co Ltd

* Says its wholly owned unit will start FinTech related business from Jan. 31, 2018
* Says it will issue 2 million new shares through private placement to Eastmore Strategies Limited, at the price of 275 yen per share (550 million yen in total), with payment date on Jan. 19, 2018
* Proceeds to be mainly used for machine purchase cost and setup cost
* Says its unit will acquire fixed assets for 564 million yen (CAN $6 million) in total, and transaction date on March 31, 2018

That’s fairly serious business, and speaks to the potential of more spending going forward.

From the outset, DMG execs have said Japan is a major focus for them, and that their board features individuals with longstanding history in the region. Japan itself has embraced cryptocurrencies as a legitimate form of currency.

“DMG’s access to the Japanese market continues to grow, and we look forward to doing more business with Forside,” said Chris Filiatrault, co-founder and chairman of DMG.
Daniel Reitzik, chief executive officer and co-founder of DMG, commented, “We are delighted to onboard our second major hosting client from Japan, which represents a significant market opportunity for us and further validation of our MaaS model.”

To be sure, DMG will need a lot more than two orders from Japan to fulfill their promise on the Canadian public markets, but they’re so far demonstrating a willingness and ability to knock out deals quickly, and for sums of money worth noting, and in ways that expand their operations and revenue potential.

From last week:

DMG BLOCKCHAIN ANNOUNCES ACQUISITION OF BLOCKSEER
DMG Blockchain Solutions Inc. has acquired Datient Inc., doing business as “Blockseer,” pursuant to which DMG’s United States subsidiary will acquire all of the issued and outstanding securities of Blockseer, and will close upon the TSX Venture Exchange’s approval. [..] Blockseer’s mission is to make blockchain data and applications accessible to everyone by providing valuable analysis of patterns, useful metrics, clear visualizations and actionable intelligence. Blockchains are a new platform that enable transactions and applications (or smart contracts) in a decentralized setting. Blockseer provides the analytics tools for these transactions and applications on the blockchain

That deal was done for a max transaction value of $16 million.

In addition, DMG expects a previous order of an additional 1,000 S-9 bitcoin mining servers to arrive at one of its facilities in March, 2018.

that, way back when the deal was coming together, a company called Element Fleet Management took out 9.9% of the company. Who is Element Fleet Management?

1 million+ vehicles under management
2,800+ customers
2,700+ employees across 12 offices
$500,000 to $40 million transaction size
50 countries served through our Element-Arval Global Alliance

I’m guessing Element didn’t invest in the company at the starting point because they had a lazy few million under the couch cushions. There’s a B2B play looming here that I’d guess we’re going to hear about eventually.

In the meantime, DMG has had a great opening week, touching nearly $2 per share before some profit taking Friday.

— Chris Parry

FULL DISCLOSURE: DMG Blockchain is an Equity.Guru marketing client, and the author owns stock in the company.

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

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