GREE Stock May Not Fair Well in a Post-Merger World

Bitcoin mining and energy era group Greenidge Generation (NASDAQ:GREE) inventory is the brand new identify and ticker of the corporate born out of the merger of Support.com and Greenidge.

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InvestorPlace.com readers will know that Support.com has been round for greater than 20 years and has a historical past of unstable revenues, low profitability and losses. Until Sept. 15, it traded below the ticker ‘SPRT.’

Support.com has been offering buyer and technical assist options for home-based staff. It has additionally been providing outsourced buyer assist and cloud-based expertise platforms to firms in a number of industries, together with media and communication, healthcare, retail and expertise.

Earlier this 12 months, Support.com took an curiosity in the crypto house, asserting a merger with the privately-held crypto mining firm Greenidge Generation. The announcement caught the eye of many crypto bulls in addition to meme inventory merchants.

SPRT inventory had traded in the $1 to $2 vary for the previous 5 years. Then, Support.com’s weak outlook attracted the eye of Reddit’s r/WallStreetBets discussion board and triggered a main brief squeeze, resulting in important good points for buyers. August meant a wild experience for the shares, which topped out at $36 earlier than dropping to $11.80 pre-merger.

But now, it’s all a part of Wall Street historical past as the corporate has, in impact, turn into a subsidiary of GREE.

Every share of SPRT entitled shareholders to 0.115 shares in GREE inventory. In different phrases, we can’t count on Support.com’s enterprise to contribute a lot to the brand new entity.

Therefore, at this time’s article appears to be like at what to anticipate from GREE inventory in the approaching weeks.

The inventory trades round $38 at this time. I count on it to be unstable till buyers have a higher thought in regards to the firm’s basic metrics. Potential buyers ought to put the shares on their radar with a view to purchase dips.

Crypto Traders and GREE Stock

Greenidge owns and operates a natural-gas-powered electrical energy era facility in addition to built-in Bitcoin (CCC:BTC-USD) mining operations. It is the one publicly-listed bitcoin miner that owns a pure gasoline power plant, which is in Dresden, N.Y. The firm is carbon impartial.

So far in 2021, Bitcoin mining has come below fireplace as it isn’t environmentally pleasant. Elon Musk, CEO of Tesla (NASDAQ:TSLA), has been one of the crucial outstanding crypto fans to encourage a greener strategy to digital forex mining.

Therefore, the vertical integration offers a important aggressive benefit to Greenidge in the crypto house. And that units GREE inventory other than two different extensively adopted names: Riot Blockchain (NASDAQ:RIOT) and Marathon Digital (NASDAQ:MARA).

The group has merged with SPRT primarily to achieve entry to the general public markets faster than a conventional preliminary public providing (IPO) or through a reverse-merger with a particular function acquisition firm (SPAC).

Many analysts have regarded it as an unorthodox deal given the 2 firms it includes, as they’ve totally separate choices, and there aren’t any obvious synergies between the 2.

For GREE inventory, the longer term lies in the expansion of digital property, particularly that of worthwhile Bitcoin mining. The group plans “to realize at the least 500 MW of mining capability by 2025.”

CEO Jeff Kirt believes the corporate, “is uniquely positioned to capitalize on future progress alternatives.”

Future quarters will present whether or not Greeridge can produce bitcoin at decrease prices and obtain increased revenue margins. If it could actually turn into worthwhile, then the Street will reward early shareholders of GREE inventory.

The Bottom Line on Greeridge Stock

Many market individuals have excessive hopes for the evolving crypto house. As a outcome, mining shares are inclined to observe Bitcoin intently.

However, buyers have but to see how GREE inventory will carry out in a post-merger world. Therefore, they need to ideally await a important pullback earlier than including the inventory to their portfolio.

Those readers who’re in crypto property and monetary expertise (fintech) shares might additionally think about shopping for an exchange-traded fund (ETF) that gives entry to progress in digital property and blockchain expertise.

Examples embody the ARK Fintech Innovation ETF (NYSEARCA:ARKF), the Capital Link NextGen Protocol ETF (NYSEARCA:KOIN), First Trust Indxx Innovative Transaction & Process ETF (NASDAQ:LEGR), and the Siren Nasdaq NexGen Economy ETF (NASDAQ:BLCN).

On the date of publication, Tezcan Gecgil didn’t have (both straight or not directly) any positions in the securities talked about in this text.

Tezcan Gecgil, Ph.D., has labored in funding administration for over 20 years in the U.S. and U.Ok. In addition to formal increased training in the sector, she has additionally accomplished all three ranges of the Chartered Market Technician (CMT) examination. Her ardour is for choices buying and selling based mostly on technical evaluation of essentially robust firms. She particularly enjoys establishing weekly coated requires earnings era.

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