Month: May 2022

The Oklo Resources Ltd (ASX: OKU) share price is soaring to its highest level this year on the back of a takeover bid.

The junior gold explorer announced after the market closed yesterday that B2Gold Corp. (TSE: BTO) made a circa $90 million offer for the ASX minnow.

Big takeover premium for Oklo shares

The Canadian miner is offering to pay 5.25 cents and swap 0.0206 B2Gold shares for every Oklo share.

This implies a total offer price of 17.25 cents per Oklo share based on today’s exchange rate.

The Oklo share price surged 87% to 14 cents during lunchtime trade. In contrast, the S&P/ASX All Ordinaries Index (ASX: XAO) gained 0.8%.

It isn’t surprising to see the Okla share price trade under the offer price. The target’s shareholders have to wear the risk when it comes to the exchange rate and B2Gold’s share price until the deal is locked in.

Oklo’s board backing the acquisition

The target’s board is backing the takeover in the absence of a better offer and is encouraging shareholders to accept the deal. The ASX miner pointed out that B2Gold is paying a large premium for the West African gold junior.

The offer price is a 127% premium to the last traded price on 25 May and 103% above the 30-day volume weighted average price.

Jewel in the crown

What the bidder gains is optionality over Oklo’s high grade Dandoko Project in Mali. Dandoko is located east of the prolific Senegal-Mali Shear Zone. It’s close in proximity to numerous world-class gold operations.

Oklo reported that an initial Measured, Indicated and Inferred JORC 2012 compliant resource of 11.3Mt at 1.83g/t gold for 668.5kOz contained gold encompassing the Seko, Koko, Disse and Diabarou deposits. These deposits remain open and are expected to grow with ongoing drilling either along strike or at depth.

More about the $90 million takeover bid

The offer from B2Gold implies a $135 per ounce of gold acquisition price. Oklo’s board has also reminded shareholders they can still participate in the upside as they will own some of B2Gold’s Toronto-listed shares.

Oklo’s managing director, Simon Taylor, commented:

The B2Gold proposal was welcomed by the Oklo Directors and comes at an opportune time for Oklo shareholders to crystalise value and de-risk their investment in the Company.

Whilst the Oklo team continues to see significant potential in the Dandoko Project and the region generally, Dandoko is at an inflection point and this transaction removes the risks associated with project development, future capital raisings and other risks faced by a junior gold explorer in a foreign jurisdiction.

The takeover will be done via a scheme of arrangement and is subject to Oklo shareholders’ approval. The scheme is also subject to other customary conditions.

While the Oklo share price has surged today, the explorer has only gained 1.4% in value over the past year.

The post Why this little-known ASX mining share is soaring 87% today appeared first on The Motley Fool Australia.

More reading

• 3 ASX mining shares soaring by more than 30% on Friday

Motley Fool contributor Brendon Lau has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The commodity trade appears to have hardly exhausted itself with ASX miners posting solid gains today.

The S&P/ASX 300 Metals & Mining Index (ASX: XMM) has climbed 188 basis points at the time of writing on Friday, outpacing the benchmark S&P/ASX 200 Index (ASX: XJO)’s 38 basis point rise.

Here are three standouts among ASX mining shares that have surged more than 30% on Friday.

Galileo Mining Ltd (ASX: GAL)

Shares of Galileo Mining raced north in early trade today, quickly heading to an intraday high of $1.95 apiece before settling back down to $1.75 on last check.

The miner has seen its share price explode in 2022 amid a number of positive updates, ranging from positive drill assays to billionaire mining prospectors upping their equity stake.

Today the company reported assays from a drill hole at its Callisto project in Western Australia had intersected rhodium, the corrosion-resistant metal used in vehicle pollution controls.

Assays at Callisto returned rhodium values up to 0.094 grams per tonne with average values across the 33-metre interval of 0.05 grams per tonne, according to the company’s release.

In the last 12 months, the Galileo Mining share price has surged more than 500% and has spiked almost 700% this year to date.

Ragusa Minerals Ltd (ASX: RAS)

Shares of Ragusa Minerals are currently moving 22% in the green after first nudging to an intraday high of 20 cents apiece in early trade.

The company announced earlier in the week that it has pivoted towards lithium, a step away from its traditional gold roots.

Ragusa has invested in a farm-in agreement that sees it lay claim over an initial 90% interest across five lithium tenements up in the Northern Territory.

Within the agreement is the option to increase that interest to full 100% ownership in the future.

Investors have rallied the Ragusa share price after the news such that the stock has climbed 118% this week, at the time of writing.

In the last 12 months, it has gained 113%, well ahead of most small-cap names in the sector.

Oklo Resources Ltd (ASX: OKU)

Oklo Resources has also seen its share price explode on Friday, currently trading 93% higher at 15 cents.

Investors have been rushing to secure a seat in the company after it announced yesterday that New York listed B2Gold Corporation is to “acquire 100% of the shares in Oklo by way of a board-recommended
scheme of arrangement.”

Under the arrangement, Oklo shareholders will receive a combined scrip and cash consideration with an implied value of 17.25 cents per Oklo share.

This is comprised of 0.0206 B2Gold shares per Oklo share and a cash consideration of 5.25 cents cash per Oklo share, the company said.

The move would therefore see shareholders realise a premium of around 19% at the time of writing, but the spread of this premium is closing at pace.

The post 3 ASX mining shares soaring by more than 30% on Friday appeared first on The Motley Fool Australia.

More reading

• Why this little-known ASX mining share is soaring 87% today
• Up 700% in 2022, why the Galileo Mining share price is leaping another 36% today
• 3 ASX mining shares going gangbusters on Thursday
• Galileo Mining share price surges another 25% on ‘very important’ drill results
• The Galileo Mining share price has been on a tear, but now it’s halted. What’s happening?

Motley Fool contributor Zach Bristow has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

While prices for non-fungible tokens (NFTs) have fallen in line with the broader crypto market in recent weeks, there is still substantial excitement around these digital assets, especially if they involve high-profile artists. Until recently, though, investors have viewed these NFTs simply as speculative artwork, and that has caused tremendous volatility.

However, what we are seeing now is the emergence of utility-based NFTs that go beyond traditional NFTs, and that is shifting attention to the blockchains making this possible. That’s good news for Polygon (CRYPTO: MATIC), which has become one of the most popular blockchains for minting new, utility-based NFTs. MATIC is now one of the Top 20 cryptos in the world, with a market capitalization of nearly $5 billion.

What utility-based NFTs are, and why they matter

In layman’s terms, utility-based NFTs combine an underlying creative asset (such as a piece of art) with extra benefits, perks or opportunities. Thus, if you hold a certain NFT, you might gain entry to an exclusive VIP club simply by holding the asset. This is possible since your possession of the asset is instantly verifiable via the blockchain. But where things get really interesting is when you consider what the blockchain enables in terms of smart contracts, which are small, executable computer programs. For example, the NFT might include a smart contract that says every holder of the underlying creative asset also gets to share in future revenue opportunities.

Thanks to blockchain technology, it is now possible for artists to release new music albums as NFTs. Already, a growing list of prominent music artists has done this, including Snoop Dogg, Kings of Leon and DJ Steve Aoki. In mid-May, using Polygon, the EDM pop duo The Chainsmokers released a new music album as an NFT. If you buy the NFT, you get perks like early access to concert tickets, free merchandise, and entry to members-only events. And here’s the best part – The Chainsmokers embedded a smart contract into the NFT giving fans a chance to earn a small percentage of overall streaming royalties from the new album. Every time a fan streams a song from the album on a service like Spotify (NYSE: SPOT), NFT buyers get a chance to participate in the upside of the album.

Leveraging the power of Ethereum

Of course, naysayers might point to the fact that Polygon is one of several blockchains being used by artists to sell new NFT albums. Snoop Dogg, for example, used Cardano (CRYPTO: ADA) when he released his latest NFT album, and others have used Solana (CRYPTO: SOL). In other words, Polygon has not cornered the market on utility-based NFTs.

However, what this line of reasoning ignores is the fact that Polygon is a powerful blockchain built on top of the Ethereum (CRYPTO: ETH) blockchain, which still dominates the market for traditional NFTs. This relationship is a huge built-in advantage. As a result, MATIC will likely be able to leverage the size and scale of the Ethereum ecosystem in order to bypass rivals. 

Polygon, recalculating the geometry of business

At the end of the day, what blockchains like MATIC enable is entirely new business models. For example, consider music. In the old days, once you paid $10 for a record album, it was pretty much a sunk cost. If your favorite artist sold millions of albums, you were literally one of millions in a crowd. You couldn’t show up at a music venue in New York City and demand VIP entry. You couldn’t use your album to get preferred seating at sold-out concerts. Your best option for making money from the album, quite simply, was trading it in at a used record store for a few bucks. Now compare that to what’s possible now, once you combine blockchain technology with smart contracts. All of a sudden, an album is no longer just an album.

With more high-profile artists already planning NFT releases in 2022, we could be seeing an exciting new evolution of business models in nearly every artistic sphere. Once investors realize how Polygon is helping to make this happen, it is easy to see how this little-known crypto could benefit from any future rebound in the NFT market.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post One little-known crypto that could benefit from a rebound in the NFT market appeared first on The Motley Fool Australia.

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Dominic Basulto owns Ethereum, Cardano and Polygon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Ethereum, Solana, and Spotify Technology. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Polygon. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Webjet Limited (ASX: WEB) share price is inching towards the end of the week in the green.

Its strong performance might’ve been brought about by positive sentiment of the travel sector overseas.

At the time of writing, the Webjet share price is trading 2.92% higher than its previous close at $6.

For context, the S&P/ASX 200 Index (ASX: XJO) is currently up 0.95%.

Let’s take a closer look at the online travel agent’s Friday gains.

Webjet share price takes off on Friday

The Webjet share price is outperforming amid good news from international airline stocks.

While most of Australia slept, Southwest Airlines Co and JetBlue Airways Corporation released positive quarterly updates, spurring the US market to bid their share prices 6% and 3% higher respectively.

Both airlines noted that increased demand was helping to offset higher fuel costs and they expected to post strong results for the June quarter. Of course, what’s good for airlines is generally positive for the travel sector, both overseas and more specifically for ASX travel shares.

Thus, the airlines’ updates have potentially spurred positive sentiment for Webjet just weeks after the company reported it had returned to profitability.

At its current trajectory, Webjet expects to reach pre-pandemic booking levels sometime between October 2022 and March 2023.

The online travel agent is sharing its spotlight on Friday. The share price of its ASX 200 peer Flight Centre Travel Group Ltd (ASX: FLT) is also in the green, lifting 3.44% to trade at $20.46.

Meanwhile, stock in Corporate Travel Management Ltd (ASX: CTD) is up 3.1% at $21.60.

The Webjet share price has gained 10% since the start of 2022. It’s also currently 18% higher than it was this time last year.

The post What’s boosting the Webjet share price 3% higher on Friday? appeared first on The Motley Fool Australia.

More reading

• Up 10% in 9 trading days, what’s going on with the Webjet share price?
• Is the Webjet share price an opportunity that can soar?
• The Flight Centre share price has taken off 5% in a week. Is travel really ‘back, baby’?
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Corporate Travel Management Limited, Flight Centre Travel Group Limited, and Webjet Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to record a solid gain. At the time of writing, the benchmark index is up 0.9% to 7,172.1 points.

Four ASX shares that are climbing more than most today are listed below. Here’s why they are racing higher:

Infomedia Limited (ASX: IFM)

The Infomedia share price is up 5% to $1.70. This morning the automotive industry software provider revealed that it has received a competing takeover proposal. Battery Ventures, a US based, global technology-focused investment firm, has offered $1.75 per share in cash. This compares to a $1.70 per share offer from TA Associates and Viburnum.

Pilbara Minerals Ltd (ASX: PLS)

The Pilbara Minerals share price is up 4.5% to $2.94. This is despite there being no news out of the lithium miner on Friday. However, investors have been buying higher risk shares today after risk sentiment improved on Wall Street overnight. This has led to a number of lithium shares recording solid gains today.

Pointsbet Holdings Ltd (ASX: PBH)

The PointsBet share price is up a massive 13% to $2.84. Once again, this appears to have been driven by improving risk sentiment. Alternatively, with M&A activity increasing in the tech sector recently, some investors may believe PointsBet could become a takeover target. Goldman Sachs gives PointsBet a M&A rank of two. This represents a medium probability of the company becoming an acquisition target.

Talga Group Ltd (ASX: TLG)

The Talga share price is up 7% to $1.40. Investors have been buying this battery and advanced materials company’s shares after it released an update on the Vittangi Graphite Project in northern Sweden. That update reveals that Vittangi’s graphite resource has been boosted by 54%, cementing its position as Europe’s largest graphite resource.

The post Why Infomedia, Pilbara Minerals, PointsBet, and Talga shares are racing higher appeared first on The Motley Fool Australia.

More reading

• ASX 200 midday update: Appen crashes, lithum shares jump
• Here’s why the Talga share price is charging 8% higher today
• Infomedia share price leaps higher on new unsolicited takeover proposal 
• Here are the 3 most traded ASX 200 shares on Thursday
• These 3 shares are topping the ASX 200 volume charts on Wednesday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Infomedia and Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Infomedia and Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s shaping up to be a rather pleasant end to the week for ASX shares and the S&P/ASX 200 Index (ASX: XJO). So far this Friday, the ASX 200 has put on a healthy 0.82% and is back over 7,150 points. But the same can’t be said for the CSL Limited (ASX: CSL) share price.

CSL shares, at the time of writing, are in the red today. They’ve lost 0.47% of their value so far and are currently going for $268.75 each. So what’s going on here? After all, this is an underperformance of the broader market of more than 1%.

Why is the CSL share price dropping today?

Well, it’s not entirely clear. There hasn’t been any news or announcements out of CSL today. Or indeed for a few weeks now.

But what we do know is that the S&P/ASX 200 Health Care Index (ASX: XHJ) is one of the worst-performing sectors on the ASX 200 today so far. Amongst ASX healthcare shares, Virtus Health Ltd (ASX: VRT) is leading the losses.

Virtus shares are presently down by a notable 1.1%. This could be related to the news we heard this morning, that Virtus has terminated the transaction implementation deed with European company CapVest in favour of a rival offer from BGH Capital.

The Virtus board is now unanimously recommending shareholders go with the BGH offer, even though the termination with CapVest will see Virtus pay a $7.19 million break fee.

This could be what is dragging the Virtus share price down today, and by extension, Virtus’ woes could be why the entire healthcare sector, including the CSL share price, is under the pump.

At the current CSL share price, this ASX 200 healthcare giant has a market capitalisation of $129.42 billion, with a dividend yield of 0.96%.

The post Why is the CSL share price losing ground on Friday? appeared first on The Motley Fool Australia.

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• Why I think these 3 ASX shares are top-quality buying at today’s prices
• After being stuck in the mud for 3 years, are CSL shares a buy today?
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• ASX shares paid out a record $98b in dividends in the 12 months to March. Which are the star performers?
• Why has the CSL share price lagged the ASX 200 over the past week?

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Xtek Ltd (ASX: XTE) share price entered the stratosphere today following a positive announcement from the company.

The defence contractor’s shares shot up to an astounding high of 49 cents this morning before settling 39% higher around 44.5 cents. At the time of writing, they have retreated slightly to 42 cents apiece, up 30%.

Let’s take a look at what the company updated the ASX with.

Xtek locks in multi-million contract

Investors are driving up the Xtek share price after the company’s subsidiary secured a significant purchase order.

According to the release, Xtek advised that its HighCom Armor Solutions Inc. (HighCom) business received a US$33.21 million contract.

The scope of the contract is for the urgent supply of “many tens of thousands of individual advanced ballistic protection items”.

Given the nature of the business, Xtek could not reveal which international customer ordered the specialist ballistic armour.

However, with the Russian war continuing to rage on in Ukraine, it’s possible the latter could be the beneficiary.

Fulfilling the order

Xtek noted its logistics team was trying to source and secure the raw materials needed to fulfill this large order.

The ultra-lightweight and high-performance body armour plates and ballistic helmets are manufactured in Columbus, Ohio.

The company expected to deliver roughly 40% of the contract by the end of year. The remainder will likely be sent sometime in the first quarter of 2023.

The latest order takes the group’s total new order bookings to more than $69.5 million since the beginning of March. More specifically, the Ballistics Division’s new orders represent $64.4 million of this.

Xtek group CEO Scott Basham commented:

…The first bulk shipment of items will be dispatched in coming days, and the business is fully committed to delivering the remaining batches of these life-saving products as quickly as possible over the coming weeks.

We continue to engage deeply with this, and other local and international customers, to assist them to resolve their urgent ballistic armour supply needs.

Xtek share price summary

Despite today’s massive gains, the Xtek share price has lost around 16% from this time last year.

Its shares reached as low as 16.5 cents in February, before almost tripling in value in the space of three months.

Based on valuation grounds, Xtek presides a market capitalisation of roughly $42 million.

The post Here’s why the Xtek share price rocketed more than 40% today appeared first on The Motley Fool Australia.

More reading

• Why is the Betashares Asia Technology Tigers ETF having such a cracker of a day?
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Betashares Asia Technology Tigers ETF (ASX: ASIA) is having a strong finish to the week.

In afternoon trade, the popular tech ETF is up over 4% to $7.12.

Why is the Betashares Asia Technology Tigers ETF storming higher today?

Investors have been buying the Betashares Asia Technology Tigers ETF today after Asian shares raced higher. This has seen Hong Kong’s Hang Seng index rise an impressive 3% today.

As well as getting a boost from a positive night of trade on Wall Street’s Nasdaq index, the Hang Seng has been given a big lift from a strong update from ecommerce giant Alibaba.

Alibaba, which is included in the Betashares Asia Technology Tigers ETF, is up over 12% in Hong Kong after posting fourth-quarter revenue of US$32.2 billion and earnings per share of 16 US cents. This was ahead of analyst expectations for revenue of US$30.8 billion and earnings per share of 14 US cents.

This has given the Asian tech sector a much-needed sentiment boost, which has led to other Betashares Asia Technology Tigers ETF holdings rising strongly today.

Here’s a summary of some of the key moves:

• The Baidu share price is up 14%
• The JD.com share price is up 5%
• The Netease share price is up 4%
• The Tencent Holdings share price is up 2.5%

What else?

Also potentially giving the sector a lift is news that Chinese authorities held an unprecedented nationwide online meeting in a bid to bolster an economy battered by COVID-19.

According to CNBC, Premier Li Keqiang warned of difficulties “even greater than the severe shock of the pandemic in 2020” and urged officials to “work hard” to deliver growth in the second quarter and a drop in unemployment. Investors appear optimistic that this pep talk will get the Chinese economy pumping again.

So, with the Betashares Asia Technology Tigers ETF trading 25% lower in 2022 even after this gain, some investors may believe the tide is finally turning for these tigers and are loading up on the ETF today.

The post Why is the Betashares Asia Technology Tigers ETF having such a cracker of a day? appeared first on The Motley Fool Australia.

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• 2 beaten down ETFs for investors to buy now
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened 

Shares of Amazon.com (NASDAQ: AMZN) climbed on Thursday, following bullish remarks from the e-commerce titan’s leadership and better-than-expected consumer-spending figures. By close of market, Amazon’s stock price was up over 4%.

So what

Like many retailers, Amazon’s profits have been dented by coronavirus-related supply chain disruptions and geopolitical-driven energy price increases. Higher product, freight, and fuel costs are ongoing challenges.

At the same time, Amazon is dealing with an excess of fulfillment capacity. The e-commerce giant invested tens of billions of dollars to build warehouses and other distribution centers to meet the torrid demand from online shoppers during the early stages of the pandemic. But with e-commerce sales slowing as more people return to traditional retail stores, Amazon now finds itself with too much warehouse space.

During Amazon’s shareholder meeting on Wednesday, CEO Andy Jassy acknowledged the problem and said the company was working to right-size its fulfillment network by delaying new builds and allowing some leases to expire. Jassy also said he was “quite confident” that Amazon would make use of its remaining capacity as sales grow.

Additionally, Jassy promised to return Amazon to a “healthy level of profitability” by prioritizing expense-reduction initiatives. “We have effectively lowered our cost structure before and I have high confidence that we’ll get back on track as we work through these incredibly unusual past two years,” he said. 

Now what

Inflation has also forced consumers to pull back on discretionary purchases. But consumer spending grew by 3.1% in the first quarter, according to a report by the U.S. Department of Commerce released on Thursday. That’s up from a prior estimate of 2.7%. Stronger consumer-spending figures bode well for Amazon, which accounts for roughly half of all online retail sales in the U.S.

Moreover, if Jassy can deliver on his promise to rein in the company’s costs, Amazon’s profits — and, by extension, its stock price — could rebound faster than the market currently expects. That could lead to handsome gains for investors who buy shares today. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Amazon stock rallied today — here’s why now might be the time to buy appeared first on The Motley Fool Australia.

More reading

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Joe Tenebruso has the following options: long January 2024 $2,000 calls on Amazon. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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When it comes to venture capital in the crypto space, there is no bigger name than Andreessen Horowitz’s A16z. The crypto venture fund has tipped billions into some of the fastest-growing projects within the industry. Yet, remarkably, the fund will be doubling down with a further $4.5 billion.

The ambitious lump of financial firepower is not without its naysayers though, with many crypto investors still licking their wounds following the collapse of Terra (CRYPTO: LUNA).

If anything, round 4 of the crypto fund illustrates the esteemed investor’s conviction for the Web3 world. Since rounding the bend into 2022, the entire cryptocurrency market has erased 45% of its former value. So, where might this $4.5 billion injection be destined for?

A16z wants in on the golden era of Web3

While the blood is still fresh in the streets of the crypto market, venture capital firm a16z is priming its bank account for another splash of crypto backing. The $4.5 billion round will take the firm’s total blockchain-based funding to $7.6 billion.

Onlookers might be wondering what the rationale is behind another dip into the unforgiving crypto waters. As the saying goes, “fool me once, shame on you. Fool me twice, shame on me.’ Well it’s now a16z’s fourth time at it, and they believe the investments are anything but foolish (with a lower case ‘F’).

A16z partner Chris Dixon explained the enticement for the venture capital firm to come back for its fourth helping, stating:

We think we are now entering the golden era of web3. Programmable blockchains are sufficiently advanced, and a diverse range of apps have reached tens of millions of users.

More importantly, a massive wave of world-class talent has entered web3 over the last year. They are brilliant and passionate and want to build a better internet.

Where will the funding be heading?

Although there were no mentions of specific projects or crypto start-ups nominated for funding in the announcement, there were some indications. According to the press release, the team at a16z is excited about areas including:

• Web3 games
• Decentralised Finance (DeFi)
• Decentralised social media
• self-sovereign identity
• Decentralised Autonomous Organisations (DAOs); and
• Non-fungible token (NFT) communities

Out of the total $4.5 billion of funding, $1.5 billion will be cornered off for seed investments. This type of investment is reserved for the initial cash injection to get an idea off the ground. Whereas, the remaining $3 billion is pegged for venture backing — those are projects/companies with an already established business.

The post A16z crypto fund readies another $4.5 billion for deployment, but where? appeared first on The Motley Fool Australia.

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• Could now be a great time to start investing in ASX shares?

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