SRAX Pops 37% In After-Market On LD Micro Acquisition Deal; B. Riley Says Buy

Shares in SRAX spiked as much as 37% in Friday’s extended market session after the digital marketing and consumer data technology company announced plans to acquire LD Micro, a data and event company serving the small and micro-cap space.

The stock soared to as much as $3.91 on the news in Friday’s after-market session. Financial terms of the deal weren’t disclosed, but it is expected to close next week. SRAX (SRAX) has developed into a financial technology company that unlocks data and insights for publicly traded companies. Through its investor intelligence and communications platform, Sequire, companies can track their investors’ behaviors and trends and use those insights to engage current and potential investors across marketing channels.

The combined entities will focus on the rapid adoption of SRAX’s Sequire platform as well as hosting virtual and in-person events, the companies said.

“LD Micro is, without a doubt, one of the most well known and respected brands in micro-cap,” said Christopher Miglino, CEO of SRAX. “LD Micro is also accretive to our investors from day one. We are confident that together we’ll accelerate the adoption of Sequire, while also enhancing LD Micro’s digital assets.”

The two companies said in a statement that “one day executives will rely on Sequire the same way investors rely on Bloomberg”.

“With more than 1 million investors on Sequire so far, we will continue hosting industry-leading forums with an audience that is 50 times our current reach,” said LD Micro founder Chris Lahiji.

SRAX shares have been on a steady winning path since reaching a low in May and are now trading 15% higher than at the start of the year. (See SRAX stock analysis on TipRanks)

B. Riley FBR analyst Mike Crawford last month assigned a Buy rating on the stock with a $4 price target (39% upside potential), citing accelerating growth and profitability inflection.

“We believe rapid adoption of Sequire in its first year since introduction positions SRAX to be cash flow positive from operations in 2021,” Crawford wrote in a note to investors. “SRAX has built and monetized valuable data sets in the past, and we see another such surge in FY20-FY22 driving substantial shareholder value.”