One of the only publicly traded Canadian companies giving investors exposure to Bitcoin has had some acquisition news out this morning. Newnote Financial (NEU:CSE) has acquired the Canadian based Bitcoin exchange Cointrader.net, as well as the CoinZero point-of-sale system, and ABMs in London and Tokyo for $1.5-million in cash and stock.
I reached out to Newnote via phone and discussed the deal with VP of Marketing Hani El Rayess. Mr. El Rayess told me this deal is a “major milestone” for Newnote in that acquiring the exchange will provide liquidity to users of Newnote’s financial services by offering Bitcoin to fiat conversion in its product lineup.
Cointrader has already generated over $300,000 in revenue last year and this is expected to grow. The $1.5 million dollar deal breaks down as $500,000 in cash payable over the next 10 months and a million in stock. The stock will be escrowed over a 3 year hold period.
- Canada’s fastest-growing bitcoin exchange;
- Processing more than $1.5-million per month in transactions;
- 10,000 active users with a sign-up rate of over 1,000 new users per month;
- Key strategic partners and business relationships in place.
I asked Mr. El Rayess about his thoughts on the current price of Bitcoin and the technology. He told me Newnote is comfortable with the current Bitcoin price but is most excited about the potential behind the technology. The team at Newnote believes Bitcoin will eventually change the way finance and payments are made just like the internet and email changed communication. The conversation quickly turned to the power of the technology as we discussed a story of when Crimea in the Ukraine was protesting Russia’s presence there and how a man in the middle of a crowd was holding a Bitcoin QR code above his head was photographed; supporters around the world sent him thousands of dollars worth of Bitcoin with little transaction fees.
Chief executive officer and president of Newnote, Paul Dickson, reports:: “This transaction positions Newnote as the de facto leader in the cryptocurrency space in Canada. Cointrader.net, CoinZero and the ABM network offer our shareholders direct exposure to the primary revenue generators in the digital currency space; it is our mission to deliver on our promise to offer the most innovative products and services available.”
Newote has an aggressive marketing campaign planned with the goal of increasing the user base of the Cointrader.net platform. Bitcoin the highly volatile digital currency last traded at $255.21 USD giving the 13.96 million coins out a market cap of $3.56 billion.
Market cap: ~$5 M
Cash: $110,566 (Sedar Oct 31,2014)
* Note NEU closed a $657,550 placement on January 5th,2015.
Discuss in CEO.ca live
This is not investment advice. All facts are to be checked and verified by reader. As always please do your own due diligence.