Remember Riot Blockchain?
Riot is, in many ways, the poster child for the absurd digital gold rush that accompanied Bitcoin's meteoric rise to $20,000 late last year. I profiled it at length back in October. Here is a brief retelling of Riot's corporate history as originally expounded in a December post:
And lest you should forget about the original poster child for this mania, Riot Blockchain, they announced a secondaryon December 18, issuing 1.64 million restricted units at a purchase price of $22.50 each. Don’t let the history here be lost on you. This is a company which, just five years ago, was licensing “intellectual property relating to recombinant single chain reproductive hormone technology for use in non-human mammals,” and which, just 21 months ago, sold its headquarters only to rent space in the back and try to build another business based on “Enhanced Surface Plasmon Resonance technology,” and which, in the final act, decided to rename itself “Riot Blockchain” and go into the cryptocurrency business.
The latest 8k lists a different address than what the company listed in the filing that detailed their transformation to a blockchain adopter. And it’s a good thing because the former address (834-F South Perry Street, Suite 443, Castle Rock, CO) matches that of a mailbox rental company called PostalAnnex that sits next to a Colorado Blimpie shop. Here is the actual location:
So that's funny. And the amusing headlines from Riot just kept on coming. They never let up. It's just one story after another, after another, after another.
Last week, for instance, they bought something called Logical Brokerage Corp., which is apparently a Miami-based cryptocurrency trading op. Then yesterday (Thursday) there was this:
Oh, and late last month, they won some of the Bitcoins auctioned off by the U.S. Marshals Service. I previewed that auction several weeks ago and until I started writing this piece, I actually hadn't followed up to see who won. As you can imagine, I was thrilled to learn that Riot was involved. Here's Bloomberg:
Riot, which invests in cryptocurrency and blockchain startups, sought many more of the 3,813 Bitcoins in the auction Monday but was outbid, Chief Executive Officer John O’Rourke said in a phone interview. The company acquired the Bitcoins at about the market price at the time, he said. That works out to about $5.2 million, based on Monday’s closing price of $10,354.
“I believe we’ll be heading north of $50,000 market price within the next 12 to 18 months,” O’Rourke said. “Our strategy at Riot is to accumulate Bitcoin and to provide our investors as much direct exposure as we can, hence we decided to participate in the auction.”
So about the above-mentioned John O'Rourke. John has come under some scrutiny lately after pocketing a cool $869,256 of sales of Riot shares following the massive run-up that accompanied the company's name change. Here's the filing (dated December 29; click to enlarge):
And here's a fun chart (click on it to enlarge):
That's obviously hilarious and unlike most other things, the absurdity there wasn't lost on CNBC. Here's what they wrote back on January 2 about John's rather rapid rise to the top of Riot:
O'Rourke rose to the head of Riot Blockchain in less than a year, public documents show.
He is a managing member of ATG Capital, which focuses on small- and mid-cap growth companies.
O'Rourke was appointed a director of Riot on Jan. 6, 2017. A few weeks after Riot's name change, an Oct. 23 release mentioned O'Rourke's "recent appointment as President of the Company."
Riot's board then appointed O'Rourke chairman and CEO on Nov. 3. Outgoing chairman and CEO Michael Beeghley's "resignation was not the result of any disagreement with the Company," a filing said.
The board approved a monthly salary for O'Rourke of $25,000 — $300,000 a year — a restricted stock award of 344,000 shares of common stock that will vest in 24 monthly installments and the option to purchase up to 100,000 shares at $10.
Ok, so fast forward to Friday and here's what's going on with Riot's shares:
What happened there, you ask? Well, Michelle Caruso-Cabrera happened. To wit:
Yeah. So I'm going to go out on a limb here and say things are going to be a lot tougher on Riot going forward.
As for John O'Rourke's response, he told Benzinga this on Friday:
This was a garbage, biased hit piece.
Sure, John. That's what it is. Riot is actually a veritable bastion of legitimacy. "A lot of people are saying that."