A new beginning, A different outlook...Hella again my dear fellow s/h. First i would like to welcome both the investors who decided to follow me from that god awful YH board and those on this new platform, Stockhouse. Some of you might know why i made the transition from there to here, and for those that don't, let's just say that the insane level of 1984ish censorship that was going on YH was making ANY rational discussion quite impossible. So here we are my friends. This will be my first post with my revised outlook on the company POST that disasterous nuclear event that completely changed the path of the company......and my opinion of it as well.
For the investors that don't know what i'm talking about or referring to as the "Nuclear event", this is that disgraceful, shameful and destructive PP the company embarked on & approved with a known short seller HC Wainwright on April 29, 2021. I won't get into the minute detalis of the how, what, why of this event, for that please refer to my previous posts here or head to the Yh board a scroll through the last few days of commentray since. Of course, you will only be able to read what Yahoo has deemed acceptable and has not removed or deleted. Most of the juicy, insightful and accurate commentary by the posters there, including myself has since been irradicated.
So what has this "event" changed? For starters, my faith, trust and confidence in the DMG mgmt team & Mr. Bennet has completely vanished. My unbreakable belief in them doing the "right" thing when it comes to their s/h is completely broken and will not return. In my mind, there is abosultely NO WAY any competent person can justify that 2nd PP being in any shape or form as being good or accretive for s/h ....none. The transparency which once shone bright in the company has been shattered with s/h and it will be very difficult for them to earn that trust back.
Another change will be my own "personal" investment in the company. Before this disaster, i was a dedicated long term believer in the company and held both trading shares & a core positon which i barely ever sold. The last time i sold my trading shares or touched my core was when it hit a high of about $5. At the time all the trading shares were sold and a small part of my core. Consequently, when the stock dropped back down to the $1.80CDN area, i re-bought back my entire trading position and increased my core by 50%. I suggested other investors who had the capacity to do so, to do the same as it was a great oppotunity to either re-enter the stock, average down or start a new position for new investors. So as i speak now, i haven't made ANY new moves on the stock since then and certainly not since s/h were basically blindsided by the company with that crazy, disasterous April PP with HCW. As for that personal change? Well, i'm not a long term holder or believer ANYMORE and have made the appropriate tactical changes to my investment strategy. My core position now has been transferred or changed over to trading shares as well and this will now be considered a swing trade and no longer a long term hold.
What were the bottomline consequences for the company by initiating the April 29 PP with HCW? There are many but only list the important ones. The first most obvious one was a short term side effect, an unwanted and probably something the company didn't fully think through. By getting into an equity raise so low and artificially pressuring the stock to levels that probably would be there under normal circumstances, you create an environment where you attract "certain" investors (if you want to call them that) you might not want in your stock. These are short term players like daytraders, swing traders, penny flippers and most imporantly the increased presence of market makers using their influence to play arbitrage. In the short to med term all these folks will bog down any upward movement in the stock when it eventually recovers.
Another fallout from that PP will the massive dilution. The folks who defended that PP and label all dilution as always being needed & equal seem to miss this very simple point.... that it is not on both fronts. The first one that was done at the beginning of March was acceptable and fairly accretive for s/h, including being a good deal long term for the financiers themselves. In other words it was needed by the company to move forward with ops and overall a good deal for everyone involved. The seond one on the other hand was the complete polar opposite and only accetive for one person or entity, HC Wainwright. What people fail to miss here is that there's only so much equity dilution that you can do at low stock prices before the share strucuture is bloated to a point where it becomes a very big hiderance for s/h and value starts to disappear. Imo, i would consdier ANYTHING under $5usd as being low level and the lower these equity raises are done, the more exponentially affected the share structure long term gets disturbed.
Why the company needed to rush this so quickly is beyond me when there was absolutely no reason to do so (as stated in previous posts) and especially doing it in a non conducive environment where they have no leverage and working at a disadvantage and will likely exacerbate the after effects. I still can't believe these guys went ahead with this, thinking it wouldnt matter, it makes a person wonder what were the real motives behind it? A question of Incompetence? Bad judgment or management? Maybe they really didnt care? Maybe they were completely outmanouvered by their financiere, simply outplayed? Personally, i think it a bit of all of the above. So with this being done and no way back, even though in the short run the real effects of this dilution will not be felt or seen, it will weight very heavy in the long run. So now instead of this company's stock being a potential $20-$30 possibility when Bitcoin explodes upwards of $100k, this dilution along with the rest have limited it to $15 tops. And in all honesty i doubt very much it even gets there for several OTHER reasons.
So to end this very long post, my predictions for the stock for the next few months is this. I believe as i've stated on the YH board, this is the bottom. The main shorting culprits have completely covered and will no begin marching the stock upwards. This, along with Bitcoin moving towards 100k, we should start regain most of what was lost since the April PP. Because of what has traspired with that PP, i can no longer rec'd this as a long term hold where the company has it's s/h interest in mind. For the simple reason you really dont know what other "surprises" these guys have in store or can pullout of the blue and blindside s/h again. There is no more transparency, no more trust in mgmt keeping their fiduciary duties and doing the right thing for s/h. For those who are looking for a great long term hold, a completely transparent company and nothing esle matters to you, i would rec'd Hive or Bitfarms/Hut8 to a smaller extent. Imo, the best thing that could happen here with regards to Dmg Blockchain, would be that someone larger like Marathon, Hive or Hut8 buys them out and put them out of their misery by removing the whole mgmt team at DMG. It would be the ideal outcome for ALL DMG s/h at this point and better for the longer term, bigger picture.