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 well-known brands have seen their stocks skyrocket after reports linked them to cryptocurrencies or initial coin offerings. Eastman Kodak Co. looked poised to double for a second day after saying it’ll sell a token, while Seagate Technology Plc jumped more than 16 percent 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 percent gain from last year. Smaller rivals from ripple to bitcoin cash have surged as investors look for new ways to tap the euphoria.
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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.”
Still, some experienced day-traders are trying to ride the surge of buying that invariably follows companies that suddenly reinvent themselves as blockchain ventures. That’s enough, market watchers say, to bring in high-frequency traders and computer algos.
“The interest in these stocks is so strong because many traders like me are so hungry for the increased volatility,” said Jim DePorre, a professional day trader and founder of sharkinvesting.com. “I know that there are still traders willing to jump in, so who cares if the stock has questionable value?”
Here’s the latest moves in stocks that’ve recently repositioned to cash in: