DPW Holdings Librehash Stock Review

DPW Holdings Jan 12, 2021

Here's another one on the NYSE that's been doing numbers (along with all of the other blockchain/crypto mining based companies that are on there clocking in massive returns).

They go by the name of 'DPW Holdings', and - according to their website - they are:

"A diversified holding company acquiring undervalued assets and disruptive technologies with a global impact. The holding company model provides the structure to raise, allocate, deploy and manage significant permanent capital. We purchase companies we believe we can operate more effectively than incumbent management. We continually assess strategic opportunities to improve shareholder value."

So these guys are self-proclaimed 'raiders' that were established in 1969 that have recently decided to pivot to the digital asset space (in some capacity)...interesting.

Quick Review: What is a 'Corporate Raider'?

source: https://www.investopedia.com/terms/c/corporate-raider.asp

Pretty much a mirror image of what was stated on the DPW Holding website ; corporate raiders come in, sweep out the incumbent management (either forcibly or via buyouts), and they essentially take control of the company's management from there.

This works well when the raiders are effective at their roles and are raiding within industries they have actual expertise in. However, it fails miserably in industries where the raider may be punching way above their weight (ask Amazon how their cell-phone foray went).

DPW Holdings and Cryptocurrency

So if you're reading this and thinking to yourself, 'What does any of this have to do with cryptocurrency?', then you're asking the right question.

As you may have deduced from the year of this entity's origin (1969), their journey to this very point in time was not underpinned by cryptocurrency.

Thus, one would not intuitively think that an investment in their stock would be the equivalent of an investment in a digital currency company (or the industry / space, in general). However, one must take into account the fact that companies are able to pivot much in the same way that 'MicroStrategy' did to hedge most of their operational budget on managing and expanding their involvement in the digital currency space (however they choose to do so), resulting in their valuation being primarily underpinned by the digital assets in question that they're in invested in (however they're invested in it).

'Super Crypto Mining' / Digital Farms

The entity that 'DPW Holding' is invovled with (related to the blockchain space) is a mining entity formerly knwon as 'Super Crypto Mining'.

Recently, it underwent a name change to 'Digital Farms Inc.' (a much more appropriate and mature name, most would agree).

Worthy of note is the structural change in this entity, stated above:

"In conjunction with changing its name, DFI anticipates entering into a new partnership with Digital Farms Management, LLC ("DFM"), a company with deep experience in the data center development and management sector as well as with real estate markets. [funny how real estate seems to constantly find its way into blockchain, right?]

SEC Filing RE: DPW Holding + Digital Farms

Here is the link to the filing on the SEC's website re: DPW Holdings and their ownership of the 'Super Crypto Mining' entity: https://www.sec.gov/Archives/edgar/data/896493/000121465919004978/ex99_1.htm (for those that wish to conduct their own due diligence on the matter)

DPW Holdings Line of Credit

Since 'Digital Farms' is a subsidiary of DPW Holding, one of the things that it does to ensure the continued growth of the company is extend a 'line of credit' over to the company, as they did back in October 2018.

source: https://dpwholdings.com/dpw-holdings-super-crypto-mining-enters-2-5-million-line-of-credit/

Specifically, the excerpt above details a 'revolving loan agreement' (essentially an extended line of credit where one can borrow as much of the available credit as they need for their operations).

More important however, is the fact that the line of credit stipulated a, "Security Agreement granting interest in certain collateral, including bitcoin"; which may be the true interest and intent of 'DPW Holding'.

Current Status of DPW Holding is Unknown

The last reports that we heard from the firm was that it was forced to shutter the doors on its crypto mining subsidiary (Digital Farms) back in March 2020 (following the brutal beating that the stock market and digital currency space took).

This is the part where we find out that DPW Holdings is a complete sham of a company (shoutout to phenomenal reporting done by 'equity.guru' here: https://equity.guru/2019/08/19/dpw-holdings-dpw-nyse-leaps-157-new-fintech-offering-rot-hides-within/). But we'll get into that a bit later in this write-up.

Digital Power Lending

This is the main subsidiary for DPW Holding that is currently in play for them in the digital currency space (for which they've thrown all their eggs into said basket).

What the Hell is 'Digital Power Lending'?

Great question - and chances are, there are only a few others that know and are knowledgeable enough to provide a real answer to that question.

But based on what we know, we can pinpoint the website here: https://digitalpowerlending.com/ (subsidiary of DPW Holding)

As well as the website itself (screenshots below):

According to the website, it specializes in, "Asset-based lending and financing", which is essentially the same thing as what Genesis Trading is engaged in at the moment.

Services Provided by the Company

Below is a screenshot from their site detailing the alleged services that they provide:

The rest of the website is really cheesy and there is little to no additional substantive information about the specific products / financial instruments that they make available to those looking to procure their services (red flag; website appears generally unmaintained beyond whatever was done to set it up).

Overall, DPW Holding is extremely unimpressive, a sentiment that was reflected in a breakdown of the company by the 'equity.guru' site that we cited above in a previous section.

DPW Holding Has Zero Diversity

That's why they're considered to be a blockchain company. They've essentially thrown all of their hopes and prayers in the blockchain space, hoping for the best outcome (without any sufficient diversification to hedge against losses in the blockchain market at all).

Given this fact, investing in these guys feels reckless - at best. However, that hasn't stopped investors from piling into this crap company anyway.

Let's take a look at its price over the past few weeks / months.

Evaluating the DPW Holdings Price

There are a few takeaways from the chart above that are worthy of illumination, such as:

The 52-week low price for this stock is $0.53 ; currently it is trading at around $4.10, which means that it has appreciated 770% from that low (which likely occurred following the March 2020 dump).

There was a strange bump in price for DPW Holdings iun November that launched the stock's price from $1.70 to a peak of $7.10, an appreciation of approx. >400%.

Since that peak, however, the price of the stock has declined steadily (which is a shame considering the near-irrational exuberance we can observe in the broader crypto markets).

Going Back to the 'Equity.Guru' Research

Perhaps the most concerning fact detailed equity.guru was the following:

"One of the problems of a company whose fortunes are tied so tightly to cryptocurrency is that when cryptocurrency suffers, they do as well. That's why DPW collapsed by 99% during the cryptocurrencybear market in 2018 after a remarkable climb in 2017, suggesting that the 'holdings' part of DPW holdings isn't holding much."

Holy shit.

-99%? That's damn near all of your funds.

Also, the analyst here is right in stating that the 'holding company' more than likely is just one by name and is actually not holding anything other than whatever Bitcoin they manage to get their hands on.

So for that reason (among a slew of others), this is a hell no, do not touch.

Tags

cryptomedication

Happy to serve and help wherever I'm needed in the blockchain space. #Education #EthicalContent #BringingLibretotheForefront

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