Shares of Longfin, a small publicly traded financial company, surged an astonishing 1,342 percent after news that the company would be purchasing a cryptocurrency company with no current value.
The explosion in share price brings the market cap for the company from $220 mln to $3.1 bln, a number which the CEO, Venkat Meenavalli, finds substantially overvalued. He told CNBC:
“We are a profitable company. … We have nothing to do with this euphoric mania. This market cap is not justified. I valued my IPO pricing at $5.”
According to the report, the share price jumped from $5.45 on Thursday last week to $72.38 on Monday, after the announcement that the company would purchase Ziddu, a Singapore-based micro-lending platform on the Bitcoin Blockchain.
Of concern for some investors was the later discovery that Meenavalli owns 95% of the Ziddu parent company, Meridian.
The news adds fuel to the fire of some cryptocurrency naysayers who believe the market is in a state of mania right now, due to the start of Bitcoin futures on the Chicago Mercantile Exchange this week.
However, other industry insiders disagree, at least in part. For example, Sergei Vasin, Blackmoon Crypto’s COO told Cointelegraph:
“It seems that cryptocurrencies like Bitcoin are stealing the show when it comes to making financial headlines. Wall Street has been watching the crypto marketplace mature with interest, waiting for Main Street’s acceptance. The velocity of inflation we are seeing now in the crypto market, is a direct response for all the added capital entering it – seemingly simultaneously. Wall Street is ready to accept the advantages and benefits that DLT and security/fund tokenization has to offer. This new phase of mainstream acceptance has only just begun.”