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Investing.com - Mogo Finance Technology (NASDAQ:MOGO) shares surged 112.4% in Wednesday trading, significantly outperforming the Russell 2000’s 1.3% gain, following a major cryptocurrency strategy announcement. The surge adds to the company’s impressive 105.6% return over the past week, with InvestingPro data showing the stock trading at 3.47 times its 52-week low.
The company revealed its board of directors has authorized allocating up to C$50 million to Bitcoin as part of its long-term capital preservation and product innovation strategy. Mogo also announced it would use Bitcoin as the hurdle rate for future capital allocation decisions, integrating the cryptocurrency fully into its corporate framework. With a market capitalization of $62 million, this represents a significant strategic shift for the company.
While the company maintains adequate balance sheet strength, with a healthy current ratio of 3.94, the Bitcoin position will likely be built gradually as Mogo remains committed to maintaining necessary working capital in dollars. The company indicated that additional monetization of its investment portfolio could potentially accelerate Bitcoin accumulation through excess capital generation. Discover more financial health metrics with InvestingPro, which offers 12+ additional insights about MOGO’s performance.
H.C. Wainwright reiterated a Buy rating on Mogo with a $4.00 price target following the announcement. The research firm noted the strategy provides MOGO investors exposure to Bitcoin without operations being directly impacted by daily cryptocurrency price fluctuations.
Mogo is expected to provide additional details about this strategic decision when it reports second-quarter 2025 financial results in early August.
In other recent news, Mogo Inc. reported its Q1 2025 financial results, revealing a slight increase in revenue to $16.7 million from $16.4 million the previous year. The company maintained a positive adjusted EBITDA of $1.1 million, reflecting a 6.1% margin, and achieved positive cash flow from operations for the tenth consecutive quarter. Mogo has also announced a strategic allocation of up to $50 million to bitcoin, as part of its long-term capital preservation and product innovation strategy. This move underscores Mogo’s commitment to integrating digital assets into its core business functions. Additionally, the company has launched "Mogo 3.0," marking a significant integration of AI across its operations. Mogo’s strategic focus on AI aims to enhance efficiency and customer experience, with over 60% of customer support interactions now managed by AI agents. While Mogo maintains a conservative outlook for 2025, it continues to explore AI-driven innovations and operational efficiencies.
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