DigiAsia Corp (FAAS) Plans to Raise Up to $100M to Buy Bitcoin, Sending Shares Soaring

DigiAsia Corp (FAAS) plans to raise up to $100 million to seed a bitcoin treasury reserve (BTC), joining a growing list of publicly traded companies looking to

DigiAsia Corp (NYSE: FAAS) shares soared on Monday after the company announced plans to launch a bitcoin (BTC) treasury program and raise up to $100 million to seed the initiative.

The capital allocation strategy, which will see DigiAsia dedicate up to 50% of future net profits toward BTC purchases, is part of a broader move by some publicly traded companies to diversify their corporate balance sheets with bitcoin.

Announcers of such programs and/or bitcoin purchases have helped fuel outsized short-term share price gains. However, in the long term, the impact of such programs on company valuations remains to be fully determined.

Having been battered throughout 2023, DigiAsia’s stock is still down more than 50% year-to-date. But the signals from the company about a new strategy and capital raise helped push its shares up 91% during Monday’s regular trading session to 36 cents.

After hours, however, they pulled back 22%.

DigiAsia, a fintech company that provides digital marketing solutions in Southeast Asia, said its board of directors had approved the strategy to allocate a portion of future net profits toward bitcoin purchases.

The company also plans to pursue yield-generating strategies on its bitcoin holdings, including institutional lending and staking through regulated partners.

“We believe bitcoin represents a compelling long-term investment and a foundational layer for modern treasury diversification,” said Prashant Gokarn, Co-CEO of DigiAsia.

The company added that it was actively exploring various financing methods, such as convertible notes and crypto-linked instruments, to support this capital initiative.

In an April update, DigiAsia reported $101 million in revenue for 2024, with projected earnings before interest and taxes of $12 million this year.

It remains to be seen whether DigiAsia will ultimately follow through with its plans to buy bitcoin and to what extent it will pursue the announced capital raise.

But the signals alone were enough to give the fintech a short-term boost on Wall Street.