A Rocky Start on the TSX
On August 1, 2023, Galaxy Digital LP made its long-awaited debut on the Toronto Stock Exchange (TSX) Venture Exchange, opening with much fanfare at 2.75 Canadian dollars ($2.11 USD) per share. However, it didn’t take long for the excitement to fizzle out, as shares experienced a swift 20% plunge within the first half hour of trading. By 1:48 p.m. ET that day, shares had further declined to 1.98 CAD ($1.52 USD).
What Led to the Decline?
To understand this rapid descent, let’s consider the conditions surrounding Galaxy Digital’s listing. The company, founded by the ever-ambitious Mike Novogratz, underwent a reverse takeover by merging with a Canadian startup, Coin Capital, and an already listed shell company, Bradmer Pharmaceuticals. This unconventional route was taken because Galaxy lacked the two years of audited financials that a traditional U.S. IPO would require. Spoiler alert: When regulatory hurdles and stringent scrutiny from Canadian authorities dance into the picture, it can make for a very awkward debut.
The Crypto Market’s Rollercoaster
The crypto market has been anything but stable. After reaching dizzying heights in late 2017, Bitcoin hit a low point this year, dipping below $6,000 after its previous peak of $20,000. This turbulence undoubtedly impacted investor sentiment and could explain why Galaxy’s share price stumbled right out of the gate.
The Numbers Game
As if the downward spiral of stock prices wasn’t enough, Galaxy Digital also had to contend with its financial track record. The firm reported a staggering loss of $134 million in its first quarterly report for 2018, including an unrealized loss of $85.5 million on digital assets. Now that’s a shocking figure for those who believed in the crypto boon! Just imagine throwing a huge party and realizing you’ve invited more financial turmoil than guests!
The Road Ahead
So where does Galaxy Digital go from here? Investors are left wondering whether the company can bounce back from this rocky start. With the crypto landscape shifting dynamically and frequently, the future remains uncertain. Will Galaxy Digital rise from the ashes like a phoenix, or is it destined to be another cautionary tale in the volatile world of cryptocurrency? Only time will tell, and in the words of every crypto enthusiast during bear markets: “HODL!”
