Diginex Shares Tumble on Acquisition Announcement

Investors have delivered a stark verdict on Diginex's latest expansion move. The company's planned acquisition of a German competitor has triggered a significant sell-off, with shareholders expressing clear concern over potential equity dilution. While management touts long-term strategic benefits, the immediate market reaction has been overwhelmingly negative.

The Nasdaq-listed stock fell sharply on Thursday, closing down more than 8% at $9.16. This decline places the share price within a volatile trading range, testing critical technical support levels. The sell-off was prompted by a letter of intent, announced December 2, to acquire Berlin-based software provider Plan A.

From a business perspective, the deal has clear strategic merits. Plan A operates an AI-powered decarbonization platform serving approximately 1,500 clients, including major corporations such as BMW, Deutsche Bank, and Visa. The acquisition is designed to transform Diginex into an end-to-end provider of ESG data, positioning it in a market projected to reach $32 billion by 2030.

Should investors sell immediately? Or is it worth buying Diginex?

However, the proposed financing method is causing alarm. Diginex intends to structure the transaction as an "all-share" deal, meaning it would use newly issued equity to pay for the acquisition entirely. The lack of disclosed financial terms—specifically the acquisition price and the share exchange ratio—has created substantial uncertainty. Investors cannot assess the degree to which their existing holdings will be diluted, leading the market to price near-term risk higher than potential long-term opportunity.

Transparency Demanded for Recovery

Market experts suggest that stabilizing the share price will require management to promptly disclose the precise financial terms of the deal. The chart outlook remains tense from a technical analysis standpoint. A breach of the key support level at $8.80 could invite further selling pressure, likely persisting until clarity on the transaction's conditions is provided. The current sentiment underscores a disconnect between corporate strategy and investor confidence, which now hinges on the swift release of detailed financial data.