Blockchain Events
Uncovering Riot Blockchain’s Secret
The following is what took place:
According to data that was compiled by S&P Global Market Intelligence, investors in Riot Blockchain (RIOT -2.73%) have seen a gain in the value of their holdings of the company’s stock this week of up to 26.3%.
The miner of cryptocurrencies presented a report on its operations throughout the month of December and made an unanticipated announcement on a name change.
As of Thursday, January 5, at 3:30 p.m. Eastern Standard Time, the price of the stock has increased by 23.3% over the course of the past week.
After that, what (where’s the Riot Blockchain secret)?
On January 4, 2019, Riot Blockchain shared an update addressing its business operations in relation to the previous month of December.
The Bitcoin miner produced 659 coins throughout the course of the month, which is an increase of 55% compared to the same period last year. The miner was able to sell 600 Bitcoin for a total of $10.2 million in profit.
It’s possible that the great growth numbers provided investors a reason to be optimistic about the company, as indicated by the stock’s precipitous jump on the day that the news was revealed.
If this is the case, then the stock’s meteoric climb is evidence of this possibility. On the other hand, the fact that the company is mining more Bitcoin does not necessarily imply that it is lucrative.
Rather, it only indicates that the company is growing. The most recent quarterly report from the corporation revealed an operational loss of $40 million, increasing the total loss for the first nine months of this year to $354 million.
Riot Blockchain stands to incur considerable monetary losses in the event that the price of Bitcoin does not rise, and does so quite rapidly.
The recent volatility trading of the company’s shares may be attributable, in part, to a number of factors, one of which is the high degree of short interest in Riot Blockchain stock.
Investors are referring to the entire number of a company’s publicly traded shares that have been borrowed by short sellers when they discuss a stock’s “short interest.
Riot Blockchain has a short interest of roughly 20%, which is a number that is regarded as being on the higher end of what is considered to be a normal range. When the price of a heavily shorted stock rises, a phenomenon known as a “short squeeze” occurs.
This phenomenon arises because short sellers are forced to cover their positions by purchasing additional shares of the company’s stock in order to maintain their profit margins. During the past week, Riot Blockchain was exposed to the possibility of encountering this situation.
In other news, the management of the company announced this week that it will be changing its name to Riot Platforms; however, it is not obvious whether anything is actually altering about the way the business is being carried out at this time.
Related Article To Read: Riot Blockchain, Inc. Has Changed Its Name to Riot Platforms, Inc.
Regardless of whether the price goes up or down, investors should avoid the Riot Blockchain (or whatever name the company chooses to give itself in the end).
This recommendation is true whether the price is going up or down. To tell you the truth, this is nothing more than a highly promotional penny stock that is attempting to capitalize on developing trends in order to pump its own shares.
It does this in order to increase demand for its own stock. If you look at the chart of its prices, you’ll discover that this phenomenon first took place in 2007, then again in 2018, and most recently in 2021.
The company’s stock witnessed a spectacular rise for a limited period of time, but investors who maintained their money in Riot Blockchain for the long haul saw the great majority of their cash disappear over the course of the investment’s lifespan.
There is no reason to believe that the outcome of events will be any different this time around. Avoid making any purchases of stock in Riot Blockchain at any cost.
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