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Highlights
- DigitalX (ASX:DCC) shares jump 38.8% after announcing $10.3 million capital raise and new advisor.
- Company secures strong support for a private placement and a rights issue to raise up to $15.4 million.
- DigitalX engages blockchain expert Antanas Guoga to help expand its digital asset services.
Small-cap ASX tech stock DigitalX Ltd (ASX:DCC) is experiencing a significant surge in its share price today, with shares jumping by as much as 38.8%. After closing at 5.4 cents yesterday, shares reached 7.8 cents in morning trade, before settling at 6.8 cents, up 25.9% at the time of writing. This sharp rise comes amidst broader market gains, with the All Ordinaries Index (ASX:XAO) up by just 0.3% at the same time.
So, what is behind the sudden surge in DigitalX’s share price?
Capital Raise Boosts Investor Sentiment
The primary catalyst for the rally is the announcement of a significant capital raise. DigitalX revealed that it had secured subscriptions for a private placement to raise $10.3 million. The company will issue 219,148,936 shares at 4.7 cents each—well below the current trading price—signaling a significant discount. The move is expected to raise essential funds to support the company’s growth and strategic plans.
Additionally, DigitalX is also conducting a rights issue for existing shareholders, seeking to raise up to $5.09 million on the same terms. This means that, in total, DigitalX is aiming to raise approximately $15.4 million. The strong support for the capital raise, particularly from both existing and new sophisticated investors, has fueled investor enthusiasm and boosted the stock’s value.
Furthermore, DigitalX’s directors have committed $611,000 under the placement, pending shareholder approval, adding further credibility to the raise.
Experienced Advisor Joins the Company
In addition to the capital raise, DigitalX shares have been buoyed by the appointment of Antanas Guoga, also known as Tony G, to an advisory role. Guoga, the chair of Canadian-listed Solana Strategies Inc., brings valuable expertise in digital assets and blockchain technology. The company expects Guoga to help expand its existing digital asset staking and validation services, potentially growing both revenue and asset values.
Guoga is also making a personal investment of $4.7 million under the placement, subject to a 12-month voluntary escrow period. The advisory agreement is set for two years, and subject to shareholder approval at the upcoming general meeting in January, Guoga will receive 25 million options, exercisable at 10 cents each, on or before the second anniversary of their issue.
What’s Next for DigitalX?
Once the placement is completed, DigitalX will have over $18 million in cash and approximately $58 million in digital assets on its balance sheet. The company also expects to receive 41 Bitcoin (CRYPTO: BTC) in 2025 from the administrators of the Mt Gox Exchange, currently valued at around $7 million based on the recent Bitcoin price.
Looking forward, DigitalX anticipates continued growth, particularly with its spot DigitalX Bitcoin ETF (ASX:BTXX), which was launched in July and has already grown to over $54 million. The company is optimistic that demand for its Bitcoin ETF will continue to rise, further enhancing its position in the market.
