The precious metals business seems to be gearing up for a new gold rush in the retail sector judging by last week’s takeover of the slightly-staid industry stalwart GoldMoney by the upstart Bitgold whose shares have soared since its initial public offering in Toronto this January. It’s an all-share deal with some big insiders.
The shareholders of GoldMoney, who include some of the biggest names in the gold business, will get 11,169,794 shares in Bitgold, valuing the transaction at $49 million. The transaction is expected to close within 60 days.
GoldMoney’s owners include: James Turk, Iamgold Corporation, the Fleming family and Eric Sprott, founder of Sprott. GoldMoney headquarters is located in Jersey and regulated by the Jersey Financial Services Commission.
Bitgold CEO Roy Sebag said: ‘With the technology of the Bitgold platform we can expand the GoldMoney legacy of trust, security and a client-centric purpose to new markets, growing from a much stronger base and benefiting all stakeholders. Combining the first global e-marketplace for gold with the latest and most innovative, we instantly become the world’s largest and most active bullion money service.’
GoldMoney founder James Turk commented: ‘We created GoldMoney with the vision of making gold accessible for savings and payments, a vision that Bitgold is rapidly expanding in a new era of cloud computing and mobile technology.
‘Together we will continue to operate GoldMoney with the same level of security, integrity and premium customer service, but GoldMoney clients will now have access to expanded payment options, a gold debit card, and the many applications and features being developed by this innovative team.’
This sounds like a reverse takeover designed to instal a new management team in a very solid but unglamorous company. It could also make the old guys rich by swapping their shares in a strong but boring privately-held company for shares in a young stock market darling.
Then again if they have called this wrong then it could be like CNN Time Warner merging with AOL in 2000, albeit on a far lesser scale. AOL proved to be a worthless Internet bubble company and CNN Time Warner the solid asset. The founders of the older company lost a fortune on that deal.
Still anybody who bought into the tiny C$3.5 million Bitgold IPO this January is laughing. At the close last week its market capitalization was C$170 million. Gold investment vehicles could be the next boom sector of the stock market. Did the last issue of the ArabianMoney monthly investment newsletter not tip Wishbone Gold, a gold investment company?
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-- Published: Monday, 25 May 2015 | E-Mail | Print | Source: GoldSeek.com
comments powered by DisqusPrevious Articles by Peter Cooper About Peter Cooper:
Oxford University educated financial journalist Peter Cooper found himself made redundant by Emap plc in London in the mid-1990s and decided to rebuild his career in Dubai as launch editor of the pioneering magazine Gulf Business. He returned briefly to London in
1999 to complete his first book, a history of the Bovis construction group.
Then in 2000 he went back to Dubai to become an Internet entrepreneur, just as the dot-com market crashed. But he stumbled across the opportunity to become a partner in www.ameinfo.com, which later became the Middle East's leading English language business news website.
Over the course of the next seven years he had a ringside seat as editor-in-chief writing about the remarkable transformation of Dubai into a global business and financial hub city. At the same time www.ameinfo.com prospered and was sold in 2006 to Emap plc for $27 million, completing the career circle back to where it began a decade earlier.
He remains a lively commentator and columnist as a freelance journalist based in Dubai and travels extensively each summer with his wife Svetlana. His financial blog www.arabianmoney.net is attracting increasing attention with its focus on investment in gold and silver as a means of prospering during a time of great consumer price inflation and asset price deflation.
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