Galaxy Digital Crypto Bank Shares Tumble 20% on Opening Day
The shares of cryptocurrency-focused merchant bank Galaxy Digital plummeted by 20% on its opening day on a major Canadian stock exchange, Wednesday, August 1.
The merchant bank started trading on Wednesday despite decreasing interest from investors and falling prices since the start of the year.
The stock which is trading under the ticker GLXY opened trading at C$ 2.75 before plunging by 20% within the first hour to trade at C$ 1.98.
The merchant bank which was launched in November by former Goldman Sachs macro trader and billionaire investors Michael Novogratz endured a torrid first day.
The shares however moderately recovered on Thursday, August 2, as GLXY traded as high as C$2.40 shortly after the market opened and kept trading around that level for the rest of the day.
In the first quarter of 2018, the company took a $134 million hit. This information was contained in its first-ever financial report in Canada last week.
The company which is based in Manhattan further reported that it recorded a net loss of $103.3 million on trading, with $13.5 million on digital assets and $85.5 million of unrealized losses on those assets.
Mike Novogratz opted to get Galaxy Digital listed in Canada as he lacks the two years’ of audited financials required for a U.S. initial public offering (IPO).
He purchased a Canadian crypto start-up Coin Capital after which he merged it with Canadian shell company Bradmer Pharmaceuticals, which was already listed on TSX.
TSX is currently the third largest stock exchange in the continent, trailing only the New York Stock Exchange (NYSE) and NASDAQ in terms of market cap.
Regulators in Canada had stalled Galaxy Digital from getting listed for eight months, during which the Bitcoin price lost more than half its value.
With Bitcoin and the entire cryptocurrency market currently in a bear cycle, it wasn’t a surprise that GLXY experienced a less-than-enthusiastic welcome to the exchange as traders sorted out the fair value of the stock.
Despite the fall in share price, Novogratz still remains optimistic about the potential of the company.
At the close of trading on Wednesday, he tweeted that:
“I’m excited to close our transaction in Canada. Our mission is to institutionalize the space and promote the advancement of the underlying ecosystem and technology behind digital assets and blockchain. I am proud of our team and grateful for the support we’ve received. Onward!”