Today’s trade; Digital Power (DPW) as a bitcoin play

Jason BondJason Bond ·

The back story: After watching Bitcoin smash through $5,000 this summer and reading the buzz around that high-water mark, I ran into a news release about a new subsidiary of Digital Power (DPW).

Coolisys Technologies Inc., according to the company’s news release, has jumped into the cryptocurrency mining market with both feet, capitalizing on the explosion of cryptocurrency miners, starting with its agreement with PoW Digital Mining to develop computing systems specifically for digital mining space.

The thesis: The “secret sauce” for achieving good profits from the mining of cryptocurrencies is that you must be super efficient.  Coolisys bought Power-Plus Technical Distributors, acquiring world-class proprietary power efficiency technologies that it expects to unleash on bitcoin, all backed by a team of electrical and computer engineers already on hand at Digital Power.

With the nearly-50-years of technical experience of designing world-class computing systems, good enough to withstand the scrutiny and demands of the U.S. Department of Defense, Digital Power has suddenly become the next niche gorilla entering the cryptocurrency space.

I have very little doubt in Coolisys’ ability to make a big dent in the soaring demand for efficient computing power in the cryptocurrency space. Digital Power has been a leading-edge expert in advanced, customized computing systems from before the first PC was invented in the early ‘1970s.

Bonus point: The new CEO of Digital Power, Bill Corbett, is no engineer; according to my due diligence, he’s a Wall Street shark -– a former Bear Stearns and Lehman Brothers kind of shark — with more than 30 years of experience in investment banking.

I have a feeling we will soon find out why a 57-year-old investment banker decided to take charge of a penny stock with an $8.2 million market cap, but the decision of a Wall Street predator to jump into the cryptocurrency space smells of money to me.

Old Wall Street is uncomfortable with cryptocurrencies, which is why JP Morgan Chase top dog Jamie Dimon is squirming every time he’s asked about bitcoin (which he considers Why do I come to that conclusion?  Simple.  Only an outsider can overtly make moves to capitalize upon the most feared threat to Wall Street banking since the creation of the Securities and Exchange Commission (SEC) in 1934.  And I’m half kidding about this.

Has anyone listened to JPMorgan CEO Jamie Dimon squirm each time he’s asked about the future of cryptocurrencies, even as he is calling bitcoin “a fraud.” As an outsider, Corbett doesn’t have to toe-the-line in opposition to cryptocurrencies; he has already made his move in the space.

How I’m playing it: I’m watching DPW closely, thinking it may have as much potential as my darling stock, Liquidmetal Technologies (LQMT) has had so far. DPW is truly under-the-radar here, with more than 20% of the company owned by insiders; with no analyst coverage and heavy insider action, an explosive surprise could be exciting.

I’ve got 30,000 shares, purchased Monday morning at 64 cents each; as always, my goal for any swing trade is a gain of 5 to 20 percent.

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    Jason Bond runs JasonBondTraining.com and is a swing trader of small-cap stocks. At the time this was published on RagingBull.com, as described in the article, he held 30,000 shares of DPW in his swing-trading portfolio, purchased Oct. 16 at 64 cents each. He had no options or open orders in DPW.

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