Halifax America Intro:
Cryptocurrency enthusiasts who were looking forward to Mike Novogratz’s crypto-focused merchant bank–Galaxy Digital LP–may have been disappointed when its shares plunged 20% during its trading debut on TSX, Canada’s largest stock exchange. It may be just a case of jumping the gun, but perhaps that was the point, as it rests on the belief that cryptocurrency will one day be on a more competitive footing with fiat currency. Again, Galaxy Digital LP’s first quarterly report was not stellar; posting a loss of $134 million in addition to an unrealized loss of $85.5 million.
Is Novogratz’s bank “ahead of its time,” or is it a matter of placing the “cart before the horse”?
After opening at $2.75 Canadian dollars ($2.11 USD) apiece for their first ever listing on Toronto’s TSX Venture Exchange, shares in Galaxy Digital LP fell 20 percent in the first half hour of trading. Shares were down further to $1.98 CAD ($1.52 USD) as of 1:48 p.m. ET August 1, according to CNBC.
Galaxy Digital LP is trading as ‘Galaxy Digital Holdings Ltd’ under the stock exchange’s GLXY ticker, slightly renamed after its founder, former Goldman Sachs partner and crypto bull Mike Novogratz, opted to secure the listing via a so-called “reverse takeover” route.
Lacking the two years’ of audited financials required for a U.S. initial public offering (IPO), Novogratz instead acquired a Canadian crypto start-up Coin Capital, which he then merged with an already TSX-listed Canadian shell company Bradmer Pharmaceuticals, CNBC reports.
TSX is the largest stock exchange in Canada and the third largest in North America by capitalization, following the New York Stock Exchange (NYSE) and Nasdaq.
As Cointelegraph has previously reported, Galaxy initially sold shares at $5 CAD (about $3.80 USD) each in a private placement this January, weeks after Bitcoin (BTC) had peaked to industry record highs around $20,000 in December 2017.
Before approving the listing, Canadian regulators subjected the firm to close scrutiny and pushed back its trading debut from April to August, during which a protracted downtrend in the crypto markets saw Bitcoin dip yet further to below $6,000.
In late June, Galaxy Digital released its first quarterly report for 2018, posting $134 million in losses with $85.5 million as an unrealized loss on digital assets.
The risk of loss in the trading of stocks, options, futures, forex, foreign equities, and bonds can be substantial and is not suitable for all investors. Trading on margin or the use of leverage is not suitable for all investors and losses exceeding your initial deposit is possible. Supporting documentation is available upon request. Trading futures, options on futures, and FX involves substantial risk of loss and is not suitable for all investors. Carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources and only risk capital should be used. Opinions, market data, and recommendations are subject to change at any time. The lower the margin used the higher the leverage and therefore increases your risk. Past performance is not necessarily indicative of future results.