Riot Blockchain Shares Climb After Making Plans for a Crypto ExchangeBy
Plans to acquire Logical Brokerage for undisclosed amount
Stock soared after blockchain rebrand, then sunk with Bitcoin
Riot Blockchain Inc. is at it again.
Shares of the former biotech-equipment maker, which saw its stock skyrocket and then plunge after renaming itself to include this year’s hottest buzzword, soared as much 23 percent after the company announced plans to launch a digital-currency exchange and a futures brokerage.
Riot, which now invests in cryptocurrency and blockchain startups, said it signed a letter of intent to purchase Miami-based futures introducing broker Logical Brokerage Corp., which delegates trade execution to other firms. Logical is registered with the Commodity Futures Trading Commission and is a member of the National Futures Association. Terms of the agreement weren’t disclosed in a statement Wednesday.
“From a business standpoint and a customer service standpoint and a regulatory and compliance standpoint, there was a need for additional competition,” said John O’Rourke, chief executive officer of Castle Rock, Colorado-based Riot Blockchain, in a phone interview. The company wants to compete with popular cryptocurrency exchanges like Coinbase and Gemini, he said.
Riot shares surged 19 percent to $15.35 as of 9:35 a.m. In New York, after climbing as high as $15.98.
Riot’s exchange will probably offer around five digital currencies, including Bitcoin and Bitcoin Cash, O’Rourke said. He expects the acquisition to close within a month, and the exchange to open within about four months.
The company announced in October that it was rebranding itself from Bioptix Inc. to Riot Blockchain after years of lackluster stock performance and minimal revenue growth, a move that led the shares to more than quadruple. The euphoria didn’t last. The stock has lost more than half of its value since Bitcoin’s Dec. 18 peak.
Other struggling companies have met the same fate. Shares of Eastman Kodak Co., the once-dominant photography company that filed for bankruptcy in 2012, have sunk 46 percent since saying on Jan. 9 that it would launch its own digital coin.
Related: Jan. 23, Riot Blockchain Claims 500 Bitcoins in U.S. Marshals’ Auction