Breaking Finance News

Digital Generation is Up 25 Percent But Who Are They? (DGIT)

Digital Generation (NASDAQ: DGIT) is up more than 25 percent Tuesday after announcing that it plans to sell off its television business and remake itself into a digital-focused company.

According to the release, Digital Generation will sell its television ad delivery business to Extreme Reach, Inc. for $485 million. The proceeds from the sale will be used to pay off outstanding debt and fund a distribution of $3 per share to stockholders.

If you’ve never heard of this company, don’t feel bad–most investors haven’t either. Digital Reach, which markets itself as “dg”, does all things advertising. The company has a full service studio that allows for advertisement creation and editing across all platforms. It also distributes advertising contents, helps producers research content with a library of more than 400,000 advertisements, and its digital media services offer services that help with syndication across that platform.

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The $357 million company has seen its gross profit increase 48 percent in the past two years. The stock currently trades at $12.85 and prior to today’s move, the stock was down about 9 percent for the year.

[stock-tools exchange="NASDAQ" symbol="DGIT" image_height="230" image_width="350"]

Disclosure: At the time of this writing, the author had no position in the company mentioned.

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