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Dec 4, 2019
Technology: Lone Analyst Drops Hive, Marking Fall of Former Crypto Star
Hive Blockchain Technologies Ltd. was an overnight stock sensation
when it became the first cryptominer in the world to trade publicly.
Two years later, abandoned by the last analyst covering it, Hive joins
the list of flame-outs on Canada’s junior stock exchange.
PI
Financial dropped coverage of the Vancouver-based cryptominer because
the company “no longer meets our coverage criteria,“ analyst David Kwan
said in an email. The stock closed Tuesday at 12.5 cents in Toronto, a
far cry from its 2017 intraday peak of C$6.77.
Hive’s opening on the TSX Venture Exchange in September 2017 was one of the most spectacular debuts
in Canada, offering investors a way to tap into a cryptocurrency fervor
sparked by Bitcoin’s bull run. Its share price tripled on the first day
and soared more than 2,000% in the weeks that followed. It hit a market
value of C$1.9 billion ($1.4 billion) at one point, making it one of the largest blockchain-related companies anywhere.
Easy listing rules on Canada’s junior exchanges have made the
country a launchpad for the next big thing -- at the time of Hive’s
debut, bitcoin miners, lithium stocks and marijuana start-ups
were all the rage. The exchanges can spark early-stage winners and
overnight millionaires as stocks soar, but they can also open the door
to blatant stock promotion, murky disclosure and spectacular volatility.
Liberty One Lithium Corp., West High Yield (WHY) Resources Ltd. --
which, like Hive, experienced blistering run ups in 2017 -- are now
penny stocks trading at a fraction of their peak.
Hive also benefited from the early backing of Vancouver mining maverick Frank Giustra, as well as $750,000 in paid online promotions. At the cryptominer’s peak in 2017, Giustra told CEO.CA,
a site popular with retail investors, that his “primary and only
concern” was to build the value of Hive, typically a three- to five-year
exercise. In a disclaimer below the article, the interviewer Tommy
Humphreys stated that he owned shares of Hive and could “be considered
extremely biased” about the companies he features.
Giustra didn’t
immediately respond to a request to his office asking if he’s still
involved in Hive and how he sees its prospects.
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