LMFA Stock: Over 10% Increase Pre-Market Explanation

By Amit Chowdhry ● Apr 23, 2021
  • The stock price of LM Funding America Inc (NASDAQ: LMFA) increased by over 10% pre-market. This is why it happened.

The stock price of LM Funding America Inc (NASDAQ: LMFA) increased by over 10% pre-market. Investors are responding positively to the company announcing plans to purchase up to $2 million in digital assets. The acquisition of Bitcoin, Ether, and other digital assets that are not securities is part of LMFA’s capital allocation strategy. 

This purchase is going to represent approximately ten percent of LMFA’s assets. And in addition, LMFA is pursuing the development of transactional capabilities involving digital assets both organically and through potential acquisitions.

On January 28, 2021, LM Acquisition Opportunities, a special purpose acquisition company (LMAO) sponsored by LMFA, had completed an upsized initial public offering resulting in proceeds of $103.5 million. LMFA is intending to announce further developments, including digital asset purchases and material vendor relationships as they materialize.

KEY QUOTES:

“We believe certain digital assets already provide an alternative to storing value in cash and cash equivalents while the blockchain technology used by other digital assets will provide the backbone for a variety of transactions in the near future. The community associations that we service are required to maintain reserve accounts that could benefit from the value preservation features of some digital assets. Additionally, we foresee increased use of blockchain technology and digital assets throughout the real estate transactional ecosystem. Our interest in developing and acquiring transactional capabilities involving digital assets requires that we implement the corporate governance and internal controls necessary for a public company to hold and transact business using digital assets. We plan to purchase, hold, and account for our newly acquired digital assets using vendors who have established best practices within the digital asset ecosystem.”

“We believe LMFA’s digital asset strategy will make LMAO more attractive to potential targets operating financial technology businesses using digital assets.”

— Bruce M. Rodgers, Chairman and CEO of LMFA

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.