Shares in Digital Power Corporation (NYSEAMERICAN: DPW) have leaped from $0.57 on November 15, 2017 to $5.25 as this is being written, handing to investors a solid gain of 821% in a month.
This is a humongous return and one based predominantly on the company’s foray into cryptocurrency hardware through its wholly owned subsidiary Coolisys Technologies, Inc., which will produce the first miner AC-DC switching power supply for use by the Antminer S9 model by Bitmain Masters.
Digital Power Corporation had in August announced an agreement PoW Digital Mining to lead its development of efficient low-cost power solutions targeting digital mining markets led by Bitcoin, Ethereum and the other 900+ digital currencies.
“To power the AntMiner S9, we will utilize our field-proven platform, previously implemented to power cloud-based computing networks and servers, that employ highly-efficient power switching with fully synchronous rectification and advanced digital signal processing (DSP),” said Amos Kohn, President and CEO of Coolisys. “Our power solutions are based on next-generation design and we believe are among the most technologically advanced power processing solutions available. We project our cryptocurrency initiatives and products could have a material effect on the Company’s revenues and net income for this component of its operations during 2018.”
Announcements are all very good, but these products still must prove market acceptance and generate sales.
Digital Power Corporation (NYSEAMERICAN: DPW) Into Mining Coins
To add fuel to the cryptocurrency fire, Digital also announced December 12 its proposed entry into the business of cryptocurrency mining through a new business division. The fledgling unit will mine the major cryptocurrencies such as Bitcoin, Ethereum, Bitcoin Cash, Litecoin, Dash and Monero. It has engaged San Diego-based IMG Networks to establish a series of digital mining farms worldwide through a network of over 10,000 digital mining machines.
The company proposed to utilize its existing infrastructure, capacity and excess space at its various existing manufacturing facilities, and the availability of “military grade” power solutions that will be used in the mining operations.
However, it appears that the company is looking to take advantage of the current fad surrounding bitcoin and the blockchain, boost its stock price by hastily cobbling together a presence in the sector by striking agreements with various entities, and to draw in investors by releasing well-timed press releases.
Its latest announcement included a cryptic remark: “The Company also disclosed today that it has been made aware of numerous unfounded and unsubstantiated inquiries and rumors but cannot address each and every one of them.”
At least one media report claimed that the company suffered from recurrent and sizable losses, declines in revenue, and capital dilutions. The same report also alleged that major shareholders were cashing in on the recent spike in share prices, and that the CEO’s daughter received curious perks.
Interested parties perhaps spread rumours that the company had secured a $450 million deal with Amazon for hardware related to cryptocurrency. It is not clear whether this had a beneficial effect on the stock price, but the company issued a denial stating that “it has entered into no agreement and has received no order from Amazon,” and also that it was “not negotiating anything with Amazon.”
Digital Power Corporation (NYSEAMERICAN: DPW) A Haphazard Cornucopia of Businesses
Digital’s current/or soon to be entered list of ventures looks like this:
- power system solutions
- hardware for digital mining
- digital mining of coins
- service textile treatment system
- commercial lending to small businesses
- executive search
- a hospitality group in Las Vegas
Investors should beware of a group with such diverse interests, given the not so impressive profit record.
Digital Power Corporation (NYSEAMERICAN: DPW) Risks Outweigh the Gains, If Any
Investors should bail from the Digital Power stock taking advantage of the current high prices. Cash in hand is preferable to taking a risk on so many new and untried business ventures as well as the hype surrounding cryptocurrencies.