Only a few days after pausing trading and withdrawals from its platform, Voyager Digital (TSE: VOYG) (VYGVF) filed for Chapter 11 bankruptcy yesterday, July 6. As a result, shares have been halted since yesterday.
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The company points to Three Arrows Capital’s default and market volatility as the reasons for this decision. CEO Stephen Ehrlich claimed that this process will allow Voyager to maximize the amount of money it can recover.
It appears that Alameda Research’s bailout wasn’t enough to save the company. The firm, which is run by Sam Bankman-Fried, offered a line of credit that was worth $485 million. Nevertheless, only $75 million is allowed to be used in any 30-day period. However, oddly enough, Alameda also owes Voyager $376.8 million.
In addition, it is unlikely that account holders will recover all their crypto back. The company’s plan includes repaying customers a mix of crypto, Voyager stock, and money recovered from Three Arrows Capital, which owes $650 million.
What Moves Have Investors Made Leading up to the Bankruptcy?
Out of the 541,138 portfolios tracked by TipRanks, only 0.3% hold Voyager Digital. In the last 30 days, 1.5% of those holding the stock reduced their positions. Likewise, 0.3% of TipRanks portfolios reduced their holdings in Voyager Digital in the past seven days.
In addition, among this small group of investors, those holding the stock have an average weighting of 2.2% in their portfolios.
Analysts’ Recommendations on Voyager Digital
Analysts currently have a high price target of $4.74 on Voyager, but it’s important to know that most of these ratings are outdated. Indeed, the three most recent ratings don’t have a price target.
Also, as mentioned earlier, it’s worth noting that trading of the stock has been halted as of yesterday, meaning traders cannot Buy or Sell at the moment.
Final Thoughts – A Long Way to Go
Both investors and clients will incur losses as a result of Voyager Digital’s collapse. The volatile nature of crypto assets, combined with unregulated lending practices, has demonstrated that the industry still has a long way to go before it can be considered safe.
