The stock of Longfin Corp (NASDAQ:LFIN) has gained almost 2,500% in just 2 days after the breaking news of taking over of Ziddu. Following the deal, Longfin Corp finds a place in a list of stocks providing exposure to the blockchain and Cryptocurrency.
Longfin Corp Becomes Public through IPO just one week Back
It is astonishing to note that the company only held the Initial Public Offering (IPO) at a price of $5 per share last week under Reg A+. After the breaking news of the acquisition of Ziddu on Friday, the stock of Longfin Corp has surged to $20 per share on Monday. The stock hit the upper circuit breaker many times on Monday itself rising above $125. It has caused halting of trade for almost 5 times for a brief period on NASDAQ as per the regulator’s requirement and finally settled above $125.
The small businesses can go for mini IPOs to raise funds up to $50,000 million as per regulation A+. The small businesses need not pay higher fees for mini IPOs when compared to the traditional IPOs. Also, the regulator does not impose any stringent requirements on smaller businesses.
With such an exponential rise, the market cap of Longfin Corp surged to almost $7 billion from the issue price of $280 million last week on NASDAQ.
The Market of Bitcoins Skyrockets as Bulls Walking in with Bulk Deals
The market for bitcoins is estimated at above $300 billion. Investors worldwide are struggling to open new accounts for Crptocurrency trading. With the entry of Longfin into the list of small firms, the craze for Cryptocurrency continues. As a result, the valuations of smaller firms are skyrocketing on news of their entry into the Cryptocurrency.
The takeover of Ziddu makes an entry for Longfin into the digital currency market. Ziddu positions itself as a micro lending solutions provider worldwide. All of the company’s transactions are conducted in Cryptocurrencies.
Longfin plans to engage in microlending using the Ziddu coins. The company accepts warehouse receipts as the collateral for microlending. According to the press release of Longfin, the Ziddu coins are pegged to Bitcoin and Ethereum.
The importers or exporters can convert the Ziddu coins into either Bitcoins or Ethereum and utilize as the working capital. The importers and exporters need to repay the amount in Cryptocurrencies with an interest varying from 12 to 48% after the expiry of the contract.
The company is looking more attractive to the investors because of its position in the fintech industry. The company leverages the machine learning and artificial intelligence to provide the FX hedging and finance solutions to small, medium enterprises as well exporters and importers worldwide.