Shares of one Chinese juice company exploded as high as 221% Tuesday after the company announced it would pivot to financial technology.
Future FinTech Group (NASDAQ: FTFT)—formerly SkyPeople Fruit Juice—is joining in on a trend that has seen companies announce a new focus on fintech, cryptocurrencies, or blockchain, and have subsequently seen their stock prices soar.
According to public filings, the pivot actually happened on May 26, 2017, but investors didn’t take notice of it until after a CNBC anchor called attention to the business. The stock was up 9% at the time of the CNBC anchor’s tweet and rocketed from there in what has become the norm for stocks that merely mention fintech or crypto in their names.
In fact, there’s a growing list of companies who’ve done the same.
Riot Blockchain (NASDAQ: RIOT), formerly Bioptix, announced in early October that it would be changing its focus from diagnostic machinery to buying cryptocurrencies and blockchain companies. Even before the company made the official announcement, the stock had already doubled on the news. Just before the announcement, RIOT was trading at just $5.39. It traded as high as $46 this past Tuesday.
Similarly, shares of a little-known import/export financier, LongFin (NASDAQ: LFIN), soared 2,400% in a matter of days this week after announcing it was buying Ziddu, a blockchain company that specializes in business-to-business warehouse payments.
The same day Future FinTech Group announced its move into the space, trading was halted by regulators on a former sports bra maker that pivoted to cryptocurrency trading after the shares had surged more than 17,000% in less than three months.
Thursday morning, Long Island Iced Tea, a New York-based tea maker, announced it was changing its name to Long Blockchain Corp, and subsequently jumped 200% in just hours.
While these examples may make you think that the crypto craze is reaching a fever pitch, these public stocks are seen by some observers as a proxy for interest in the cryptocurrency sector by traditional investors.
And, to be sure, as long as bitcoin and cryptocurrencies in general continue to climb and dominate headlines, companies that have little or nothing to do with the technology will get in on the action and see their stock prices skyrocket, and fast-acting investors will make a killing.
If you’re revving to buy into the trend, now’s a good time. With Friday’s correction in bitcoin and the broader cryptocurrency market, not only are actual coins cheaper, but so too are shares of the companies that have moved into the space.
And not only that, as cryptocurrencies and blockchain technology continue to become mainstream, new companies will be entering the space. Watch for headlines noting companies changing their names to anything with “fintech,” “blockchain,” or “crypto,” and act fast to buy in.
If investing in companies that have simply changed their name to get into the field—which echoes of the dotcom era—is a little too speculative for you, look to chip makers like Nvidia (NASDAQ: NVDA) and AMD (NASDAQ: AMD) instead.