MGT Capital Investments Inc. (OTCMKTS:MGTI) shares have been down over 70% in a one-year period recently, but the stock could start to rebound and recoup all of its losses after the catalysts that it’s had recently. Now, one of the primary developments that could drive MGTI higher was the announcement of a major expansion of Bitcoin mining, but more on that later. Let’s take a look at what the company does, first.
MGT Capital Investments, Inc. is currently engaged in the process of acquiring and developing a diverse portfolio of cyber security technologies. Now, the company has John McAfee as its leader, and therefore, MGT Capital Investments may be well-positioned to address various cyber threats through advanced protection technologies for mobile and personal tech devices, as well as corporate networks. MGT’s first product, Sentinel, an enterprise class network intrusion detector, is scheduled to be released by the end of June 2017. Additionally, MGT Capital Investments entered into a joint venture with Nordic IT to develop and market a mobile phone with extensive privacy and anti-hacking features. The Privacy Phone has a tentative release date of February 2018.
Let’s get into some company news. With the recent meteoric rise in Bitcoin prices, MGT Capital Investments Inc. (OTCMKTS:MGTI) announced that it closed on financing that could allow the company to ramp up its Bitcoin mining operations, which could be a key driver of its share price. The financing consists of a $1.35M 10% convertible note, which is convertible at $1.05 per MGTI share, issued to one single institutional investor. The convertible note is self-amortizing and has a maximum repayment of $90K per month. Not only that, but the company also issued the investor 1.2M warrants with an exercise price of $1.05 per MGTI share. Although this would dilute the company’s shares, raising capital to grow its business could benefit the company in the long run.
According to John McAfee, “Today’s announcement is transformational for MGT. Not only does it vastly improve our financial profile, but it positions us as the only public company in the space at a time when Bitcoin has enormous momentum.”
The proceeds from the financing would allow MGT Capital Investments to purchase 1K Bitmain Antminer S9 computers and associated power supplies. After this purchase, MGT would be operating 1,400 Antminer S9 computers and could potentially generate 225 Bitcoins per month, which could be valued at hundreds of thousands of dollars per month.
Now, this wasn’t the only positive catalyst the company had recently. MGT Capital Investments also announced that it entered into a joint venture partnership with Nordic IT Sourcing Association Venture Partners in order to develop and market one of the world’s most secure mobile phones. The joint venture would be known as JMPP Oy, and domiciled in Helsinki, Finland. MGT Capital Investments would be responsible for the design, engineering and testing of the mobile phone. Nordic IT would be responsible for sourcing strategic partners in order to assemble and manufacture the phone, and sales and marketing.
John McAfee stated, “The phone will not be hack proof but it does give the user enormous power over his or her privacy and it will be light years ahead of the many other phones on the market claiming to be secure. Over time, future versions will be as hack proof as humanly possible.”
With these two recent developments, MGTI shares could rise, as the expansion of its Bitcoin mining operations, as well as the joint venture partnership, could drive the company’s revenues and earnings. You might want to follow MGTI for any new press releases, because it could potentially cause the stock to rise. Now, it’s pretty easy to stay up to date on MGTI, if you subscribe to our free newsletter. All you have to do is enter your email address below, and you’ll be on your way to receive updates, if any, on MGTI.
Disclosure: No one at Street Register has been compensated in any way for the publishing of this article, nor do we hold any position in MGTI stock, short or long.