Now that it is abundantly clear that for a stock to explode higher, all that is necessary - and sufficient - is a press release mentioning the company's name and throwing in the word "blockchain" in the same sentence (see Riot Blockchain and LongFin Corp), other public microcaps have decided that if that's all it takes, then by all means they will gladly take investors' money. And so, this morning there is not one but two such examples, the first of which is the $15 million market cap Net Element, which describes itself as a "global financial technology and value-added solutions group that supports electronic payments acceptance in an omni-channel environment spanning across point-of-sale (POS), e-commerce and mobile devices."
Trite, generic, and boring... and yet the company's stock is up more than 280% in premarket trading, rising from $5 to $19 per share...
Why? Because in a press release this morning, Net Element announced the launch of a blockchain-focused business unit. The details include virtually every possible blockchain-linked buzzword one could imagine and which would trigger headline-scanning algos to buy the stock:
The new business unit is expected to become a decentralized crypto-based ecosystem that will act as a framework for an unlimited number of value-added services ("VAS") that can connect merchants and consumers directly utilizing blockchain technology while increasing the economic efficiency of all transactions being made within the ecosystem. Net Element has partnered with Bunker Capital to develop and deploy blockchain technology-based solutions.
In addition, the blockchain-focused business unit intends to identify and invest into unique projects which decentralize and disrupt the payment processing industry by combining blockchain technology and real world applications with talented development teams, strong fundamentals and large addressable markets.
And then, just for kicks, the company throws out a few random industry size numbers, which should help investors make the decision to just buy as the company's market cap is clearly so very tiny compared to the "$600 billion" opportunity:
According to CoinMarketCap, cryptocurrencies' total market values have increased from $17.7 billion to over $600 billion in 2017, which indicates the rising interest in adoption of blockchain and cryptocurrency.
And then the glowing vision on a hill from the CEO:
"We believe that we're at the dawn of a new evolution where additional digital payment methods are being introduced," commented Oleg Firer, CEO of Net Element. "Introduction of our division focused on blockchain as part of the NASDAQ-listed entity will add transparency and compliance assurance to our investors as well as provide access to deploy value-added services to over 20 million electronic commerce clients that are currently part of Net Element's growing network."
If Longfin is any indication, whose stock soared from $10 to $142 in two days, NETE will be trading in the triple digits in no time.
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It wasn't just Net Element. Separately, Nova LifeStyle, which is a "U.S. based innovative provider of modern furntiture products and services" announced today that the Company intends "to begin accelerating the use of Blockchain technology to further enhance the brand recognition of Nova’s traditional furniture business while also creating a platform to offer other potential products and services."
Huh? Blockchain in furniture? Oh yes:
The Company believes that the integration of Blockchain into the current business model is essential to the future growth of Nova LifeStyle. With the recent launch of nova-mart.com, Nova LifeStyle is in the process of incorporating a Blockchain-based loyalty rewards system as an addition to the current furniture business in the coming months.
And if there is any wonder why management is delighted...
“We feel that Blockchain technology is the next major advancement in business and we want to take full advantage of this opportunity,” said Tawny Lam, Nova LifeStyle’s Chief Executive Officer. “We believe that with this rewards based system, we will successfully utilize Blockchain technology as another way to help grow the Company. Embracing new, emergent technologies is very much in keeping with our corporate emphasis on innovation and trend-setting and we expect the inclusion of Blockchain programs to help accelerate our revenues.”
... one look at the company's share price this morning should answer this question.
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Finally, it's worth noting that the blockchain insanity is not limited to only America: on Tuesday, shares of China’s Future Fintech Group, an unprofitable firm formerly known as SkyPeople Fruit Juice, exploded as much as 220% higher after it announced it would pivot to financial technology, eventually closing up roughly 127%.
As Business Insider notes, the pivot happened on May 26, 2017, according to public filings, but investors appear to have taken little notice before today. The stock steadily declined in price through the summer before Tuesday’s extreme rise. According to the company’s website, it "utilizes financial technology solutions to operate and grow its businesses. The Company is actively leveraging e-commerce and new technology platforms, and is building a regional agricultural products commodities market with the goal to become a leader in agricultural finance technology."
Ironically, FTFT previously received a warning from Nasdaq on December 1 for failing to maintain a market value above $5 million and risked being delisted if it did not pass the threshold by May 2018, according to public filings. Well, thanks to the magic of "blockchain", yesterday's jump brings the firm’s market cap to roughly $9.57 million.
Expect more such amazing "overnight success stories" as the bubble grows bigger and bigger.