What happened to the Chapmans Ltd share price?
At the time of writing, shares of Chapmans Limited [ASX:CHP] are up by 14.29%, to 0.8 cents, in today’s trading.
Why did Chapmans Ltd shares do this?
Last week, Chapmans raised AU$4.552 million, comprising of AU$1.59 million in equity and AU$2.962 million in unsecured convertible loans due at 30 June. Chapmans used the funding to acquire a 19.99% stake in GPU.One. GPU.One is a profitable data processing and cryptocurrency company focused on mining leading cryptocurrencies including bitcoin, ethereum, and Litecoin.
What now for Chapmans Ltd?
The acquisition provides significant share price upside potential. Take a look at the diagram below:
GPU.One is currently producing revenue of US$365,000 per month — a number that should increase to US$4,000,000 per month (circa June 2018), once the project is scaled up. Bitcoin hit US$9,000 this morning — a four-week high. Assuming cryptocurrencies continue to surge in the weeks ahead, Chapmans share price could rocket higher.
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That said, should the crypto market crash — the worst case scenario — the GPU facilities can be converted to a data processing/storage centre, with potential revenues of US$7 million-plus per month. The company is also in the process of acquiring other blockchain investments, worth roughly $11 million.
Chapmans market capitalisation is trading at $11 million at 0.8 cents per share, with plenty of cash in the bank.