Investing

Dot-Com Bubble Lessons Eating Your Bitcoin and Blockchain Stocks

Digital Power Corp. (NYSEAMERICAN: DPW) is tiny and volatile, with an $85 million market value. Despite some concerns, its shares remain higher than when it was first featured. Digital Power’s power supply products and custom power system solutions are going to target cryptocurrencies, and the company raised a small amount of capital to finance an acquisition and to finance a purchase order. Its shares were down 15% to $4.11 on Friday’s close, in a 52-week trading range of $0.40 to $5.95.

Longfin Corp. (NASDAQ: LFIN) is a newly traded company, going from fintech and then seeing an exponential surge from about $5 to $125 after announcing the acquisition of a blockchain company. Its drop was 10.7% to $41.00 a share on Friday.

Long Island Iced Tea Corp. (NASDAQ: LTEA) was down 13% at $6.01 on Friday, but this stock had gone from $2.50 earlier in the week up to almost $8.00 after the company announced it would change names to Long Blockchain, with a strategy shift to the exploration of investment blockchain technology — while still keeping its beverage business. It still has just a $58 million market cap despite the major pop.

Marathon Patent Group Inc. (NASDAQ: MARA) might be called a patent troll by some because of how many patents it owns, but buying crypto-mining Global Bit Ventures allowed its shares and market value to triple in two months. Its shares were down 9.4% to $4.44, with a $55 million market cap on Friday, but the 52-week range is $0.52 to $10.03.

MGT Capital Investments (MGTI), with John McAfee as its leader, has executed purchase orders for additional Antminer mining rigs with Bitmain Technologies, and the shipment is expected early in the first quarter of 2018. MGT’s bitcoin mining operations will be comprised of over 5,000 Bitmain S9s. Its over-the-counter shares were down 3.5% at $4.88 on Friday, in a 52-week range of $0.46 to $8.14

Nova LifeStyle Inc. (NASDAQ: NVFY) is a tiny California-based outfit that designs, makes and sells furniture. After announcing the blockchain-enabled launch of “I Design Blockchain Technology Inc.” it will accept bitcoin and other cryptocurrencies. The shares fell 9.7% to $2.59 on Friday. The 52-week range is $1.06 to $3.10, and the market cap is $71 million.

Overstock.com Inc. (NASDAQ: OSTK) has been around forever and recently was the first major retailer to accept cryptocurrencies. The company is also using blockchain subsidiary tZERO to launch a $250 million ICO (initial coin offering) and has announced small trading or financing deals with Siebert (Kennedy Cabot). Shares of Overstock were trading at $63.00, in a 52-week range of $13.75 to $82.70 and with a consensus price target of $85.00.

Riot Blockchain Inc. (NASDAQ: RIOT) was a $7 stock a couple of months ago. The company was previously known as Bioptix, and it intends to gain exposure to the blockchain ecosystem through targeted investments in the sector, with a primary focus on the bitcoin and ethereum. An 11% drop to $24.52 on Friday may sound bad enough, but this was a $45 stock briefly on Tuesday after the company announced a capital raise to go deeper into its strategy.

Social Reality Inc. (NASDAQ: SRAX) is an internet advertising and platform technology (digital marketing and data management platform) company with a $47 million market cap. Its shares surged with an ICO and on news that it is developing a blockchain identification graph technology named BIG Platform. Its shares fell 9.1% to $5.09 on Friday. The 52-week range is $1.11 to $7.95.

Square Inc. (NYSE: SQ) also has been a beneficiary of the bitcoin craze, seeing shares surge after its soft bitcoin launch. Back on November 15, Square started allowing a small number of users of Square Cash to buy bitcoin directly from its smartphone app. Square shares rose from $40 to almost $50 in just a few days, but Square went back under $40 a week ago. BTIG recently has warned that Square investors were ignoring risks. Square’s shares were under $14 at the start of 2017, and its stock was down 2% at $35.14 on Friday.

U.S. Global Investors Inc. (NASDAQ: GROW) had seen its shares surge late in 2017. This is a boutique registered investment advisory firm. Barron’s has noted that the company mines bitcoin in Iceland, where electricity is cheap. Its shares went from less than $1.50 in September to over $5 briefly at the end of November. They were down 13.7% at $4.07 on Friday, versus a 52-week trading range of $1.25 to $7.49. The market cap is just over $61 million.

Crypto Co. (CRCW) has seen the U.S. Securities and Exchange Commission (SEC) halt its over-the-counter shares over concerns regarding the accuracy and adequacy of information in the marketplace. The company deals primarily in bitcoin and other cryptocurrencies, including consulting and advice to companies regarding investment and trading in the digital asset market. After coming public in September with the shares close to $3.50, they had risen to over $500 on thin volume before being halted.

Companies elsewhere want their part of the crypto-bubble as well. HIVE Blockchain Technologies trades in Canada under the ticker HIVE. This company was formerly Leeta Gold, and now it sell itself as a Canadian company within the blockchain sector that has partnered for cryptocurrency mining out of Iceland. Its stock was down 10% at C$3.25 on Friday. It issued a release on December 18 that it had raised $50 million.

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