Crypto mania turns mainstream
It’s one thing for an iced-tea maker or a furniture company to reap massive returns simply by rebranding with blockchain or adding a digital currency, but now some household names are joining in on the craze.
In the past week, at least four companies with wellknown brands have seen their stocks skyrocket after reports linked them to cryptocurrencies or initial coin offerings. Eastman Kodak Co. has almost doubled for a second day after saying it’ ll sell a token, while Seagate Technology PLC jumped more than 16 per cent Monday after a simple blog mention suggested it was entering the space.
The flood of higher-profile names is perhaps the next logical step for a frenzy that’s generated massive paper profits for virtually all comers in recent weeks. Long Island Iced Tea Corp. became the poster child for the craze, when its shares tripled after morphing into Long Blockchain.
Meanwhile, bitcoin, the largest cryptocurrency, is struggling to hold onto its 1,400 per cent gain from last year. Smaller rivals from ripple to bitcoin cash have surged as investors look for new ways to tap the euphoria.
For all the breathless coverage of the mania, there remain just as many naysayers. On Wednesday, billionaire Warren Buffett said on CNBC that most digital coins won’t hold their value.
“In terms of cryptocurrencies, generally, I can say almost with certainty that they will come to a bad ending,” Buffett said. “Now when it happens, or how or anything else, I don’t know. But I know this: If I could buy a five year-put on every one of the cryptocurrencies, I’d be glad to do it, but I would never short a dime’s worth.”
Here are the latest moves in stocks that have recently repositioned to cash in:
Shares of Kodak rose about 75 per cent after doubling Tuesday. The former film heavyweight said Tuesday that it would use blockchain technology and launch a “photo- centric cryptocurrency” called Kodakcoin. Chief executive Jeff Clarke then told Barron’s that “this doesn’t change the fundamentals in a way that means the stock should double.”
Executives from Helios and Matheson Analytics Inc., the majority owner of film subscription service MoviePass Inc., said in a Yahoo Finance interview Tuesday that they would consider an initial coin offering and have been examining blockchain technology. The stock climbed 21 per cent.
Shares of Seagate Technology PLC, the l argest maker of computer drives, surged as much as 16 per cent Monday after a little-followed blog contributor suggested the company may have a stake in Ripple, the company behind the third- most- valuable cryptocurrency.
Western Union Co. shares climbed as much as 6.1 per cent Friday, the biggest gain since July 2015, after a website called Ripple News reported an unconfirmed connection between the moneytransfer firm and Ripple.