Fintech DeFi buoyed by completed acquisition of digital asset liquidity provider
Shares of fintech company DeFi Technologies rose around 6.0% on the Cboe Canada stock exchange and about 3.5% in over-the-counter trading in New York on Monday, October 7. The gains followed the announcement that the company had completed the acquisition of Stillman Digital, a leading digital asset liquidity provider. Zacks Small-Cap Research (Zacks SCR) has said it believes DeFi is trading at about half its fair value.
Details
On Monday, DeFi Technologies saw its stock rise 5.9% on the Cboe Canada to close at CAD2.87 ($2.10) per share. On the same day, it added 3.45% to $2.10 per share in over-the-counter trading in New York. The stock has skyrocketed more than 296% since the start of the year and 2,525% over the last 12 months.
Earlier on Monday, DeFi announced the successful acquisition of Stillman Digital, an OTC trading platform specializing in digital assets. Stillman operates as a liquidity provider, facilitating cryptocurrency deals in exchange for a fee.
About the companies
Founded in 2021, Stillman Digital has facilitated over $20 billion in digital asset trades to date, with a quarter of that volume generated in the second quarter of 2024, according to the DeFi press release. The platform services high-net-worth individuals, digital asset miners, family offices, and hedge funds.
The acquisition is expected to enhance DeFi’s trading capabilities while diversifying its client base and revenue streams. DeFi currently operates several business lines through its subsidiaries. One of the main ones, Valour, issues exchange-traded products (ETPs). The press release notes that whereas Stillman focuses on institutional investors, Valour primarily serves retail traders, allowing them to access digital assets like Bitcoin via their traditional bank accounts. In late September, Valour introduced its Ethereum Physical Staking ETP for professional investors on the London Stock Exchange. As of September 30, the DeFi subsidiary managed CAD757 million ($561 million) in assets.
Another key DeFi unit, DeFi Alpha, focuses on identifying low-risk arbitrage opportunities within the crypto ecosystem, i.e., exploiting discrepancies in prices for digital assets across different exchanges or markets.
The deal was an all-stock acquisition. With the support of DeFi, Stillman now plans to expand into custodian services and foreign exchange.
Analyst insights
In a report published in August, Zacks Small-Cap Research valued DeFi at $4 per share, nearly double the most recent closing price in the U.S. In mid-September, the company filed to list its shares on the Nasdaq Stock Market while continuing to maintain its listing in Canada.
