For some investors, the name means everything. That was the case recently when On-line Plc, a British technology company, surged 394% after changing its name to On-line Blockchain Plc (LON:ONL). The simple addition of “blockchain” to the corporate name gave the company its single largest daily gain since going public in December 1996.
In a statement recently released, the company said, “blockchain technology and cryptocurrencies are a new and exciting area we have been working on for some time. We feel the time is right to re-name the company to reflect these developments, where we believe the future growth will be in our sector.”
Bloomberg On-line Blockchain plc
There is no denying that blockchain and cryptocurrencies are absolutely on fire right now. Bitcoin continues to see new all-time highs faster than major stock indices. While the fundamentals and demand for Bitcoin continue to soar, a growing crowd is concerned that prices have gone too far too fast.
On-line Blockchain Plc is not the only example of investors flocking to companies that have added “blockchain” to their name. Bioptix, Inc. recently announced it is changing its name to Riot Blockchain Inc. (NASDAQ:RIOT),, which led to shares surging 17%, after a rally of nearly 100% leading up to the name change announcement. Prior to the name change, the company manufactured diagnostic machinery.
Some critics compare the latest craze to the Pets.com mania from the Dot-Com Bubble. Pets.com was a company founded during the late 1990s internet boom, when anything with a “dot-com” in its corporate name immediately seemed to attract investor capital. The company raised $82.5 million in a successful IPO in February 2000 that eventually hit a high of $14 per share. However, by November 2000, the company’s stock was trading around $0.20 per share and investors had lost nearly all of their invested capital. Pets.com existed for just over two years before its collapse at the height of the bubble burst.
While Bitcoin and cryptocurrencies are still great long-term concepts, there does seem to be some level of irrational exuberance within the markets. Considering the fact the initial coin offerings (ICO) are raising millions of dollars for companies and simple name changes are attracting sizable investor capital, it is not shocking to think a correction is near. However, the long term is still bright for these emerging technologies.