Addentax Group Corp. ATXG stock skyrockets after announcing plans to acquire up to $800 million in crypto

By issuing common stock in exchange for crypto assets, the company aims to strengthen its balance sheet while bringing experienced crypto investors into its shareholder network.

Shares of Addentax Group Corp (NASDAQ:ATXG), a China-based diversified business group, were surging on Thursday after it announced plans to buy up to $800 million in crypto via a share-based deal. The stock later gave up its gains.

The company announced plans to acquire up to 8,000 Bitcoins and other major cryptocurrencies, which would be valued at around $800 million, through a potential transaction involving the issuance of its shares, shifting its focus to the digital asset space.

The company said it is in discussions with several prominent cryptocurrency holders for the potential purchase of up to 8,000 Bitcoins and assets such as the Official Trump coin. At current market prices, the proposed acquisition is valued at approximately $800 million.

"We can confirm that discussions are ongoing and progressing well, but no definitive agreement has yet been reached," the company said.

ATXG said it views the potential transaction as a key part of its long-term strategy to expand its footprint within the digital asset space. By issuing common stock in exchange for crypto assets, the company aims to fortify its balance sheet while also bringing experienced crypto investors into its shareholder fold.

The targeted holders, who are estimated to collectively control around 8,000 Bitcoins, bring significant expertise and networks within the cryptocurrency industry, which ATXG intends to tap into to broaden its market footprint and drive growth within the blockchain sector.

CEO Hong Zhida said the move is part of a broader initiative to position Addentax within the evolving digital economy.

"This initiative serves to support the Company's broader blockchain strategy by facilitating potential acquisitions of digital assets such as Bitcoin and introducing strategic investors with experience in the crypto ecosystem," Zhida said.

He added that established digital currencies could serve as stable, long-term holdings given their liquidity and the increasing interest from institutional entities.

Related ETFs: Bitwise Crypto Industry Innovators ETF (NYSE:BITQ), Valkyrie Bitcoin Strategy ETF (NYSE:BTF)

ATXG shares are trading higher by 75.32% at $1.26 at the last check on Thursday.