Contributor, Benzinga
April 27, 2022
Last update: 3:59PM (Delayed 15-Minutes)
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Vol / Avg.2.929K / 81.203KMkt Cap3.831M
Day Range1.740 - 1.92052 Wk Range0.141 - 4.240

Since the invention of blockchain technology, many investors have embraced the concept of decentralized financial applications or the ability to conduct transactions and business processes without the need for a 3rd-party intermediary. But not everyone is happy, particularly the Internal Revenue Service. Last year, the tax agency offered a $1.25 million bounty to anyone who can crack the anonymous underpinnings of the Monero blockchain.

But this heightened concern raises a question: What if anonymity can work for the betterment of society? That’s the ethos behind communications software firm DatChat and its stock offering.

When is the DatChat IPO Date?

DatChat IPO’d on August 13, 2021 at a price of $4.15 per share.

DatChat Financial History

Undergirding DatChat’s long-term opportunity in the digital ecosystem are two key businesses. First, the communications software firm features the flagship applications DatChat Privacy Platform and Private Encrypted Social Network, both of which enable personal users and commercial clients to communicate with others while maintaining full privacy and control throughout the lifespan of distributed content — including the deletion of already-sent messages.

Such modularity in the communications stream could be a gamechanger for DATS stock. As any digital etiquette expert will advise, emails should receive a thorough look over before hitting the submit button. Like a bullet fired from a gun, you cannot take an email back once it's launched into the world wide web.

In the least-consequential cases, an unintentional message distribution may only result in red faces. But, too many times faulty emails or other content promoted social harm. For instance, in 2019, the University of South Florida St. Petersburg mistakenly sent 430 acceptance emails to applicants anxiously awaiting an official decision.

In other cases, companies can erroneously distribute marketing material that contains false pricing data or other pieces of misleading information. Subsequently, such errors can lead to costly corrections and reputational damage.

The 2nd pivotal business under the DatChat brand is the development of a blockchain-based, decentralized communications platform. Under this protocol, enterprise-level clients can communicate directly with their customers without the need for an administrator facilitating message transmissions between sender and receiver.

Again, this division represents a huge revenue-making opportunity for DatChat. As the Pew Research Center reported in November 2019, a majority of Americans are concerned about their online activity data collection and its possible exploitation. Therefore, it’s not unreasonable to assume DatChat will enjoy a robust addressable market.

Still, prospective investors should be aware that DatChat is a pre-revenue company, per its IPO prospectus. In addition, with very limited monthly active users, the company’s investment thesis relies on a narrative that might not pan out.

On Aug. 12, 2021, DatChat priced its IPO — consisting of 2.89 million shares of common A stock and series A warrants to purchase these amounts of common shares — at $4.15 per unit. Before the deduction of underwriting discounts, commissions and other expenses associated with the public market debut, the offering had stated gross proceeds of approximately $12 million.

The following day on the IPO calendar, DatChat made its entrance into the public market, with its shares trading on the Nasdaq under the ticker symbol DATS. EF Hutton, a division under privately held Benchmark Investments, LLC, acted as lead bookrunning manager. Also, Tiger Securities provided support as joint bookrunning manager.

Although August has been a relatively slow month in terms of new offerings, DatChat debuted during a hectic day, with 20 companies pricing their IPOs across global markets. Moreover, its first public session — which coincidentally occurred on Friday the 13th — did not quite go according to plan, with DAT stock opening at $3.95 and finishing at $3.42, a 13.4% loss.

Still, on its 2nd day, DatChat recovered some of the prior losses, closing at $3.78, up 10.5% from its Friday launch. Posting an eventful series of trades, DATS stock reminded investors that buying new issues at their initial offering price is not always an advantage. In this case, acquiring shares at the original $4.15 would have netted you a loss of 9% at the end of August 16.

Certainly, with some public debuts, the ability to pick and choose which offerings to participate in — a luxury which institutional investors don’t usually receive if they choose to buy pre-IPO shares — more than makes up for missing out on early bird pricing opportunities.

DatChat Potential

Back in 2015, ABC News featured the story of Adam Smith, a former CFO of a medical device manufacturer who lost his job for protesting Chick-Fil-A’s stance on LGBTQ+ issues to one of the fast-food restaurant’s employees. Unfortunately for Smith, the video of this encounter that he filmed went viral, leading to sharp public condemnation for bullying.

Soon, Smith’s company gave him the axe as the firm became inundated with threatening voicemails. Adding insult to injury, despite a public apology, Smith could not find another job, so notorious was the broadcasted incident. Eventually, as ABC News reported, the former corporate officer was reduced to feeding his family with food stamps.

To be sure, Smith blundered greatly in disrespecting the Chick-Fil-A employee — and he would be the first to tell you that. However, at a certain point, multiple penalties for singular errors create more harm than good.

First, the fallibility of humanity and the virtue of extending grace underlines multiple religious and spiritual beliefs. Even Harvard Health Publishing wrote an inspirational piece regarding the “power of forgiveness,” citing health benefits such as “lower levels of depression, anxiety and hostility.” Thus, harping on past ills denies all involved parties access to mental health and wellness.

Second, a CareerBuilder survey revealed that “34% of employers have found content online that caused them to reprimand or fire an employee.” In the most extreme cases, terminating valuable employees for nonwork-related conduct imposes unnecessary economic hardships.

Quite possibly, though, passing judgment has already become a sport in society. Therefore, maintaining full control of our communications — even and especially after we send them — will become critically important, thereby bolstering DatChat’s potential.

How to Buy DatChat (DATS) Stock

If you already know how to buy stocks, you can jump right in. If not, just follow the steps below.

Step 1: Pick a brokerage.

Thanks to the growing popularity of personal investing, competitive dynamics forced brokerages to standardize key financial incentives, such as commission-free trading. Therefore, you’re free to pick a platform that suits your needs. Below is a list of best brokers to narrow down your choice.

Step 2: Decide how many shares you want.

Stocks can be volatile and unpredictable. To manage this risk effectively, you should pick a balanced share count that affords you solid rewards if your wager goes right but mitigates downside if it doesn’t.

Step 3: Choose your order type.

Before taking your shot, familiarize yourself with these market concepts.

  • Bid: The maximum price a buyer will offer, the bid is always lower than the ask.
  • Ask: The minimum price a seller will accept, the ask is always higher than the bid.
  • Spread: Principally the difference between the bid and ask price, the spread also signals market liquidity and risk. Tighter spreads imply higher liquidity and lower risk, while the opposite is true for wider spreads.
  • Limit order: You can trade stocks at a specific price through limit orders. This approach offers price transparency but no execution guarantees.
  • Market order: Conversely, you can guarantee fulfillment through market orders but only at the prevailing rate, which may fluctuate significantly by the time your order goes through.
  • Stop-loss order: A defensive tool for your portfolio, a stop-loss order automatically exits your position at either a predetermined price or anything lower.
  • Stop-limit order: In contrast, stop-limit orders only execute at a predetermined price, ensuring total control of your automated exits. However, such orders carry the same nonfulfillment risk as limit orders.

Step 4: Execute your trade. 

To execute a market order, follow these steps:

  1. Select your action type (buy or sell).
  2. Enter the shares you want to acquire (or sell).
  3. Hit the Buy (or Sell) button.

Follow the same sequence for limit orders (but include your execution price).

Taking Control of our Digital Footprint

Everyone makes mistakes. Unfortunately, social media can be a cruel place, acting as judge, jury and executioner for singular “crimes” in perpetuity. But by implementing control for users’ messaging streams and removing 3rd-party oversight in communications networks, DatChat restores privacy and dignity in the digital realm.