Last week we brought you the story of Longfin, a newly public startup trading on Nasdaq whose decision Friday to acquire a blockchain-based company called Ziddu.com and rebrand as a crypto enterprise sent the stock shooting up over 200 percent. As we noted, the investors/algos driving the stock up evidently didn't take into account the highly unusual circumstances of the acquisition – namely, that the CEO of Longfin also happens to be the CEO of Ziddu.com. Perhaps such trifles can be overlooked given the mind-blowing potential of a “Blockchain-empowered solutions provider that offers Microfinance Lending against Collateralized Warehouse Receipts.”
Anyway, we'd expect that whatever cryptomaniacal frenzy that drove the stock to such extremes Friday would have tempered a bit over the weekend. Perhaps shares would return to the sleepy single-digit range they occupied last week.
Ah, how naive of us:
Nothing has changed between Friday and Monday, so far as we can tell, except that the $280 million market cap the company had last Wednesday is now around $7 billion.
The a 2,400 percent explosion follows a reliable pattern. A completely unknown bargain-basement company suddenly refashions itself as a crypto player and within a few minutes the stock is vertical. The bubblicious power of the crypto is not limited to the exchanges of bitcoin and its peers; cryptomania rears its head whenever even the mere mention of the blockchain occurs in the vicinity of a publicly traded stock.
There is one notable exception, though. Big established banks have been talking up their blockchain experiments for a couple years now at least, yet the effort doesn't seem to be reflected in their stock prices. When a JPMorgan or BNY Mellon announces that some early-stage trial run of a blockchain-based application has concluded successfully, there's a murmur of approval and little else. Meanwhile if some ball bearings manufacturer in Michigan announces they're pivoting to Global Cryptocurrency-Based Supply Chain Management Decentralization Via Blockchain Solutions for the Twenty-First Century, it's like they just cured cancer.
What a great time to be alive.
UPDATE: Nasdaq has had a hell of a day: