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An important oenologist, listed on the board of directors of the Hong Kong Stock Exchange, is to acquire a majority stake in a Japanese cryptocurrency trading platform. The agreement is intended to "obtain a better return" to the shareholders of the company.
In search of diversification
Madison Holdings Group – a $ 534 million-listed winery listed on the Hong Kong Stock Exchange of the Hong Kong Stock Exchange is set to purchase a majority stake in the Japanese cryptocurrency BitOcean trading platform.
According to the release, Madison will purchase 67.2 percent of BitOcean from independent third parties for about $ 15.12 million, paying another $ 15 million in different fees. BitOcean is among the operators currently registered with the Japanese Financial Services Agency (FSA).
Speaking of this, Raymond Ting Pang-wan, president of Madison, said that the agreement is part of the company's diversification strategy:
Our wine business is stable and profitable, but then it is small. It is difficult to turn wine into a big business. This is why we need to diversify into financial technology and the cryptocurrency business – to achieve a better return for our shareholders.
It does not matter the falling prices
Despite the prolonged bear market 2018, which saw the price of Bitcoin (money price) losing more than 80% from its historical maximum value in January, the president of Madison does not seem worried at all. He said:
Bitcoin is cheap, which has created a good opportunity for us to enter the market. We are looking at the long term, so we are not worried about short-term volatility.
Ting also stressed that Japan is a particularly appropriate destination for a cryptocurrency trading platform, as it "accounts for about 20% of the bitcoin trade worldwide".
Bitcoinist reported that the Japanese Yen is set to exceed the US dollar in Bitcoin / fiat trading.
In addition, according to the president of the Hong Kong Securities Association, the agreement represents a "small investment" of the company, given its total market capitalization of about half a billion dollars. So, it is not such a big risk for its financial well-being.
However, legislator Kenneth Leung Kai-Cheong urges investors to be careful:
Madison has built its reputation through the trading of fine wines, is a newcomer in the virtual currency industry. Investors must pay attention to the risks that arise when a company operates in two separate business lines.
What do you think of Madison's decision to acquire BitOcean? Do not hesitate to let us know in the comments below!
Images courtesy of Shutterstock
