Mogo adds Bitcoin to its Treasury Management Strategy

Rhea-AI Summary

Mogo Inc. announces a shift in treasury management strategy to include Bitcoin and Bitcoin ETFs with an initial investment of up to $5.0 million. The company believes in the long-term investment opportunity for Bitcoin and highlights recent regulatory approvals and support from major asset managers. Mogo's Q3 financial report shows cash and total investments of $43.7 million, including a significant ownership in WonderFi Technologies Inc.

Insights

Financial Analyst

An investment of up to $5 million in Bitcoin and Bitcoin ETFs by Mogo Inc. reflects a strategic shift towards asset diversification and potential risk mitigation. The allocation of a portion of their treasury into cryptocurrency could be seen as a hedge against inflation and a move to capitalize on the growing acceptance of Bitcoin as an investment asset. This decision might be appealing to investors who are looking for companies with exposure to digital assets, potentially leading to an increase in the company's stock attractiveness.

However, the inherent volatility of Bitcoin poses a risk of substantial value fluctuations, which could impact Mogo's financial stability and investor confidence. The timing and scale of the investment will be crucial, as will the company's ability to manage the associated risks. The impact on the stock market will depend on the broader market's perception of Bitcoin's future value and the success of Mogo's investment strategy in delivering returns.

Market Research Analyst

Mogo's increased investment in Bitcoin and the endorsement from global asset managers like Fidelity and BlackRock signal a broader market trend of digital assets gaining legitimacy as an alternative investment class. This move could position Mogo as a forward-thinking player in the financial technology sector, potentially attracting new customers interested in digital wealth management.

Long-term, if Bitcoin continues to be embraced by institutional investors, Mogo's early adoption and integration into their strategy could provide a competitive edge. However, market sentiment towards cryptocurrencies can shift rapidly and regulatory changes could either bolster or undermine Mogo's strategic investment. Monitoring these variables will be essential for understanding the potential market implications of Mogo's decision.

Economist

Mogo's investment in Bitcoin and Bitcoin ETFs can be interpreted as a response to macroeconomic trends, such as currency devaluation and the search for non-correlated assets. From an economic standpoint, the diversification into cryptocurrency may offer potential inflationary hedge benefits. However, the impact on Mogo's financial health will depend on the cryptocurrency market's performance, which is influenced by a range of factors, including regulatory shifts, technological advancements and shifts in investor sentiment.

While this move may reflect confidence in the long-term prospects of Bitcoin, it also exposes Mogo to the economic risks associated with the volatility of digital currencies. The challenge for Mogo will be to balance this new investment strategy with the need to maintain a stable financial base to support its core business operations.

Board Approves an investment up to $5 million

VANCOUVER, British Columbia--(BUSINESS WIRE)-- Mogo Inc. (NASDAQ:MOGO) (TSX:MOGO) (“Mogo” or the “Company”), a digital wealth and payments business, today announced that its Board of Directors has approved a change to its treasury management strategy to include Bitcoin and Bitcoin ETFs and authorized an initial investment of up to $5.0 million.

“Mogo was an early entrant to crypto investing in North America having first invested in Bitcoin in 2020, and we continue to believe in the long-term investment opportunity for Bitcoin,” said Greg Feller, President of Mogo Inc. “The recent regulatory approval of spot Bitcoin ETFs, along with the commitment of several of the world’s largest asset managers such as Fidelity and BlackRock, support our view that Bitcoin is a legitimate global asset class with attractive qualities that make it a unique store of value. Today’s announcement, along with Mogo’s ~13% ownership in WonderFi, provide our shareholders with meaningful exposure to this asset class.”

For the third quarter ended September 30, 2023, Mogo reported cash and total investments of $43.7 million. This included combined cash and restricted cash of $19.3 million and investment portfolio of $24.5 million. Mogo’s assets also include 87 million common shares (approximately 13% of the shares outstanding) of WonderFi Technologies Inc. (TSX: WNDR), one of the largest regulated crypto investing ecosystems in Canada.

About Mogo

Mogo Inc. (NASDAQ:MOGO; TSX:MOGO) is a digital wealth and payments company headquartered in Vancouver, Canada with more than 2 million members, $9.9B in annual payments volume and a ~13% equity stake in Canada’s leading Crypto Exchange WonderFi (TSX:WNDR). Mogo offers simple digital solutions to help its members dramatically improve their path to wealth-creation and financial freedom. MOGO offers commission-free stock trading that helps users thoughtfully invest based on a Warren Buffett approach to long-term investing – while also making a positive impact with every investment. Moka offers Canadians a real alternative to mutual funds and wealth managers that overcharge and underperform with a fully managed investing solution based on the proven outperformance of an S&P 500 strategy, and at a fraction of the cost. Through its wholly owned digital payments subsidiary, Carta Worldwide, Mogo also offers a low-cost payments platform that powers next-generation card programs for companies across Europe and Canada. The Company, which was founded in 2003, has approximately 200 employees across its offices in Vancouver, Toronto, London & Casablanca.

Forward-Looking Statements

This news release may contain “forward-looking statements” within the meaning of applicable securities legislation, including statements regarding the Company’s investment in Bitcoin or Bitcoin ETFs and general treasury management strategy. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by management at the time of preparation, are inherently subject to significant business, economic and competitive uncertainties and contingencies, and may prove to be incorrect. Forward-looking statements are typically identified by words such as "may", "will", "could", "would", "anticipate", "believe", "expect", "intend", "potential", "estimate", "budget", "scheduled", "plans", "planned", "forecasts", "goals" and similar expressions. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual financial results, performance or achievements to be materially different from the estimated future results, performance or achievements expressed or implied by those forward-looking statements and the forward-looking statements are not guarantees of future performance. Mogo’s growth, its ability to expand into new products and markets and its expectations for its future financial performance are subject to a number of conditions, many of which are outside of Mogo’s control. For a description of the risks associated with Mogo’s business please refer to the “Risk Factors” section of Mogo’s current annual information form, which is available at www.sedarplus.com and www.sec.gov. Except as required by law, Mogo disclaims any obligation to update or revise any forward-looking statements, whether as a result of new information, events or otherwise.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240307907424/en/

US Investor Relations Contact

Lytham Partners, LLC

Ben Shamsian

New York | Phoenix

shamsian@lythampartners.com

(646) 829-9701



Craig Armitage

Investor Relations

investors@mogo.ca

(416) 347-8954

Source: Mogo Inc.

FAQ

What is the ticker symbol for Mogo Inc.?

The ticker symbol for Mogo Inc. is MOGO.

What is the recent announcement made by Mogo Inc. regarding its treasury management strategy?

Mogo Inc. has approved a change to its treasury management strategy to include Bitcoin and Bitcoin ETFs with an initial investment of up to $5.0 million.

What does Mogo Inc. believe in terms of the long-term investment opportunity for Bitcoin?

Mogo Inc. continues to believe in the long-term investment opportunity for Bitcoin, citing recent regulatory approvals and support from major asset managers.

What were Mogo Inc.'s cash and total investments reported for the third quarter ended September 30, 2023?

Mogo Inc. reported cash and total investments of $43.7 million for the third quarter ended September 30, 2023.

What is Mogo Inc.'s ownership stake in WonderFi Technologies Inc.?

Mogo Inc. holds approximately 13% ownership in WonderFi Technologies Inc., one of the largest regulated crypto investing ecosystems in Canada.