Market Overview

Want Your Stock To Rally? Just Mention 'Bitcoin' Or 'Blockchain'

Want Your Stock To Rally? Just Mention 'Bitcoin' Or 'Blockchain'

Wednesday’s top pre-market movers had one thing in common, and it’s the same thing just about every stock is moving on: blockchain.

Longfin Corp (NASDAQ: LFIN) went from $5.30 to $142.82 after acquiring blockchain micro-lender

Seven Stars Cloud Group Inc (NASDAQ: SSC) spiked 62 percent on news of its stake in Delaware Board of Trade Holdings, Inc. and intent to use DBOT’s SEC-licensed blockchain in fintech developments.

Siebert Financial Corp. (NASDAQ: SIEB) rose 27.5 percent after parent Kennedy Cabot sold a 1-percent stake to Inc (NASDAQ: OSTK) blockchain subsidiary tZERO.

Overstock, itself, rode a 17.3-percent rise on news of tZERO’s token launch.

Related Link: Why The Bitcoin Bubble Is Different From All Other Bubbles

Power Of The Blockchain Buzzword

Dennis Dick, cohost of Benzinga’s PreMarket Prep radio show and proprietary trader at Bright Trading LLC, said the buzzword-based phenomenon is unprecedented.

“This stuff is nuts,” Dick said on Wednesday’s show. “...You have companies that actually have business models already put in place. They mention blockchain technology in a press release and then go up ... 700 percent in days.”

In some cases, the plan isn’t even detailed — maybe not even formed.

NXT-ID Inc (NASDAQ: NXTD) rallied 138 percent on news of its mere intent to develop a platform converting cryptocurrency to retail-accepted currency.

On Track Innovations Ltd (USA) (NASDAQ: OTIV) nearly tripled after citing vague development of bitcoin capabilities on Monday, and Top Image Systems Ltd. (NASDAQ: TISA) popped 45 percent on a recirculated October report mentioning mere potential to embrace blockchain.

Inspired Imitation

Other companies have taken notice of the value boost and made their own blockchain announcements, including Echo Global Logistics, Inc. (NASDAQ: ECHO)’s joining of the governance board of the Blockchain In Transport Alliance; Gridsum Holding Inc - ADR (NASDAQ: GSUM)’s reveal of a blockchain-leveraging customer-relationship-management solution; and Nova Lifestyle Inc (NASDAQ: NVFY) and Net Element International Inc (NASDAQ: NETE)’s launching of blockchain business segments.

Dick doesn’t anticipate a slowdown.

“You’re going to start seeing 20, 30 companies a day coming out and doing this and eventually it’s not going to move [the stocks],” he said.

It seems management teams are responding to market demand, particularly as bitcoin plays trend. Traders are craving blockchain exposure, algorithms are capitalizing on mere mentions, and companies are cashing in.

“It’s almost like flat-out trying to manipulate your price higher, unless they’ve really got the real stuff and they’re really changing their whole business model, but I think some of these are just coming out with press releases to take advantage of the mania and pump their prices up, and I think they’re probably dumping stock,” he said. “If they are doing that, a lot of those people in those companies should go to jail.”

A handful of stocks joined the party Thursday, including ChinaCache International Holdings Ltd (NASDAQ: CCIH), NQ Mobile Inc (ADR) (NYSE: NQ) and Future Fintech Group Inc (NASDAQ: FTFT), and Long Island Iced Tea Corp (NASDAQ: LTEA).

Listen to the full show below, and Dick's full commentary on these stocks starting at 33:30.

PreMarket Prep is a daily trading ideas show hosted by former floor trader Joel Elconin and prop trader Dennis Dick. You can listen to the show live and participate in our chatroom every day from 8-9 a.m. ET here. The show is also available on YouTube Live. The podcast is available on iTunes, Soundcloud, and Stitcher.


Related Articles (ECHO + CCIH)

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