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Shares of Mogo Finance Technology Inc. shot up by as much as 35 per cent Monday after the fintech company said it would roll out dedicated blockchain capabilities to support crytocurrencies including Bitcoin.
The target launch is the first quarter of 2018.
Mogo’s stock rose to an intra-day high of $5.29, up from Friday’s close of $3.93. The shares closed up 31 per cent at $5.15 on the Toronto Stock Exchange.
The Vancouver-based company said the rollout of blockchain, a distributed ledger technology that has been touted for its ability to increase security and reduce costs, would accelerate plans to integrate cyptocurrencies into Mogo’s suite of products and services such as multi-product mobile accounts.
“Developing new products and features based on blockchain technology and cryptocurrencies is a natural extension for Mogo as we continue to build a digital banking experience for the next generation of consumers,” said David Feller, the company’s founder and chief executive, in a statement.
“Canadians, especially tech savvy millennials, want a safe, trusted and easy way to own and ultimately use Bitcoin and other cryptocurrencies,” added his twin brother Greg Feller, who is Mogo’s chief financial officer.
“We have the ability now, because of the digital account that we built, to very quickly add new, innovative product and we’ve got the scale to roll them out,” Greg said, adding that investors are starting to take notice. “As we continue to roll out new products, people are realizing that we truly are this platform company and that obviously is part of what people are starting to appreciate in the market.”
The firm’s blockchain initiatives will be led by Wayne Chen, who was hired as the company’s senior product manager. Chen previously designed and developed a Bitcoin wallet and exchange as head of product at nTrust.
“Blockchain technology will clearly have a profound impact on the next-generation banking experience and we are excited to begin adding this into our product and platform roadmap,” Dave Feller said.
He added that Mogo would continue to build on legal and compliance systems that support the firm’s digital platform as the regulation of blockchain “further evolves.”
Nikhil Thadani, an analyst at Mackie Research Capital Corp., said he expects Mogo to be in a position to roll out a cryptocurrency wallet by as early as the first quarter of 2018. This “should not only help organic revenue growth (at Mogo) but could also help the company grow its user base faster,” the analyst said.
In a note to clients, Thadani increased his target price on the stock to $9 a share from $7.
Postmedia Network Inc., owner of the Financial Post, has a marketing and revenue sharing agreement with Mogo.
With files from Bloomberg News