Investors are abuzz Thursday morning following the closing of a reverse triangular merger that saw Sysorex (OTCMKTS:SYSX) share price rise six-fold yesterday and has Inpixon (NASDAQ:INPX) stock up 8.62% in pre-market activity.
Rounding out the “triangle” of the deal is TTM Digital Assets & Technologies, a data center owner and operator and now the largest U.S. publicly traded Ethereum (CCC:ETH-USD) mining company. The transaction will result in the moving of TTM’s business and operations to become the core business of Sysorex as the first Ethereum company trading in the U.S. public markets, according to Sysorex.
Sysorex will continue to operate its legacy business providing a suite of network performance, secure wireless access and cybersecurity products to the U.S. government through a wholly owned subsidiary.
Looping back, then, Inpixon in parallel converted a note receivable due from Sysorex, in an aggregate amount of approximately $9 million, into shares of SYSX stock valued at above $17 million.
In a typical reverse triangular merger — if “typical” is possible — the acquiring entity creates a subsidiary that merges into the selling entity and then liquidates, leaving the seller as the survivor and a subsidiary of the acquirer. The buyer’s stock is then issued to the seller’s shareholders.
Maximizing Benefit for INPX Stock Holders
“While Inpixon has no plans to enter the crypto mining business, we look forward to capitalizing on what we believe is an attractive opportunity at the right time to maximize value for our shareholders,” INPX CEO Nadir Ali said in a press release.
“The prevalence of Bitcoin, Ethereum and other digital currencies and their values have risen substantially over the past several years and dramatically in the past six months. The use of Ethereum for non-fungible tokens (NFTs), development of apps and peer-to-peer financial transactions are becoming increasingly mainstream, and marquee financial institutions and other household name organizations are accepting digital currencies and also adding this asset class to their balance sheets,” Ali commented further.
TTM has since 2017 mined and distributed Ethereum to management and its investors. ETH has appreciated 3.26% in the past 24 hours.
TTM owns and operates more than 12,000 Nvidia (NASDAQ:NVDA) graphics processing units (GPUs), including a large number of specialized cryptocurrency mining processors. These GPUs are currently online and securing the Ethereum blockchain and generating ETH around the clock with industry-leading efficiency, according to the company.
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, including stints with Bloomberg News and as a sell-side equities research editor.
