Why Securitize Stock Surged Today

The Motley Fool · 2d ago

Key Points

  • Top-tier asset managers are partnering with Securitize.

  • River One offers access to the massive asset-backed finance market.

Shares of Securitize (NYSE:SECZ) spiked 22% on Tuesday after the tokenization platform announced an intriguing acquisition.

Dollar symbol surrounded by blue digital rings and binary code, representing financial technology.

Image source: Getty Images.

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The tokenization trend is taking hold

Securitize's revenue rose 13% year over year to $18.6 million in the third quarter.

The financial technology provider helps convert ownership of real-world assets into digital tokens stored on a blockchain, bringing greater access and transparency to previously illiquid markets.

Average tokenized assets on Securitize's platform jumped 39% to $5 billion.

"That growth came from tier one asset managers bringing real products onchain including new ones from Ark Invest, BlackRock, and Neuberger, and to me it's the clearest sign yet that institutions are past the experimenting stage," CEO Carlos Domingo said.

Still, investors should note that Securitize has not yet achieved sustained profitability. The company's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) checked in at a loss of $2 million.

New markets should fuel further growth

Securitize also struck a deal to acquire River One to enter the $6 trillion asset-backed finance market. River One specializes in connecting the $321 billion global stablecoin market with the traditional lending industry.

The deal is projected to close in the fourth quarter.

"Credit is one of the most exciting emerging asset classes for blockchain-based financial markets, and acquiring River One represents an important step in expanding our business into this space," Domingo said.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends BlackRock. The Motley Fool has a disclosure policy.