DGTW Stock Price Increases Over 90%: Why It Happened
Nov 30, 2020
This morning, the stock price of DigitalTown, Inc. (OTCMKTS: DGTW) was trading at more than 90% today. This is why. The stock price of DigitalTown, Inc. (OTCMKTS: DGTW) — a company that provides integrated search, community, and commerce platform for web and mobile devices — has been trading at more than 90% today. And over 424 million shares were traded today alone. But it’s worth mentioning that the stock price was only $0.0022 per share as of the previous close so it is a high-risk stock to trade. Back in late September, DigitalTown had announced it was using a voluntary Chapter 11 process in order to position the company for longer-term success. Specifically, the company filed for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of Minnesota, St. Paul Division. DigitalTown has been overhauling its business for over a year now. The company installed a new management team in May 2019 . And the company also said it has made substantial progress on its commitment of cleaning up the company’s balance sheet and exploring opportunities that would bring value to the company’s shareholders. For example, DigitalTown had successfully converted over $2 million on debt into stock and the company structured a go-forward plan with appropriate financing measures. The execution of the plan was conditional on negotiating a satisfactory resolution with its former CEO Richard Pomije — who had an active and previously disclosed lawsuit against the company at that time. However, DigitalTown’s various negotiation efforts were unsuccessful, which led to the granting of a summary judgment motion in favor of Pomije. And since that time, the same party has filed another lawsuit against the company with the reported goal of having management resign and turn over control of the company to him. Domain Name Wire pointed out that the bankruptcy filing stated that DigitalTown owed Pomije $1.4 million. “After careful consideration of all challenges and alternatives, we firmly believe that our Chapter 11 process represents the best long-term solution for DigitalTown to address its legal and liquidity challenges and to strengthen its operations for future growth and profitability,” stated Sam Ciacco, CEO and Chairman of the Board of DigitalTown at the time of the bankruptcy. DigitalTown’s strategic direction pivoted several times over the last decade or so. When Pomije had stepped down from DigitalTown back in 2012, the company was building a social network platform for high school students at the time. And four years later, the company had announced it acquired over 11,000 .CITY domain names for use. Then in August 2018, DigitalTown had announced it partnered with an Atlanta-based blockchain game reward engine company called Monetizr to enable the exchanging of Monetizr Tokens (MTZs) with participating DigitalTown merchants — who receive a free digital storefront and low commission rates on their city’s platform powered by DigitalTown. The reason why DigitalTown decided to leverage the benefits of Chapter 11 was to emerge with a healthier balance sheet and reorganize its debt. The management of the company said that was the preferred alternative to a Chapter 7 Bankruptcy — in which the positions of DigitalTown’s creditors and shareholders positions would be entirely lost. Why The Stock Price Increased Today
On November 27 afternoon, the company’s Twitter account published a tweet that said:
“Our Plan of Reorganization has now been filed on PACER, ahead of the December 7 due date, and in support of our upcoming December 3rd hearing. Happy reading!”
And Twitter user @Mbowden111 said that DigitalTown received two financing commitments: one commitment was from PowerUp Lending Group Ltd. to fund about $300,000 of working capital for the company. And Premier Venture Partners was offering a $5 million equity line of credit facility.