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Bitcoin mining and power generation group Greenidge Generation (NASDAQ:GREE) stock is the new name and ticker of the company born out of the merger of Support.com and Greenidge.
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InvestorPlace.com readers will know that Support.com has been around for more than two decades and has a history of volatile revenues, low profitability and losses. Until Sept. 15, it traded under the ticker ‘SPRT.’
Support.com has been providing customer and technical support solutions for home-based employees. It has also been offering outsourced customer support and cloud-based technology platforms to companies in multiple industries, including media and communication, healthcare, retail and technology.
Earlier this year, Support.com took an interest in the crypto space, announcing a merger with the privately-held crypto mining company Greenidge Generation. The announcement caught the attention of many crypto bulls as well as meme stock traders.
SPRT stock had traded in the $1 to $2 range for the past five years. Then, Support.com’s weak outlook attracted the attention of Reddit’s r/WallStreetBets forum and triggered a major short squeeze, leading to significant gains for investors. August meant a wild ride for the shares, which topped out at $36 before dropping to $11.80 pre-merger.
But now, it is all part of Wall Street history as the company has, in effect, become a subsidiary of GREE.
Every share of SPRT entitled shareholders to 0.115 shares in GREE stock. In other words, we cannot expect Support.com’s business to contribute much to the new entity.
Therefore, today’s article looks at what to expect from GREE stock in the coming weeks.
The stock trades around $38 today. I expect it to be volatile until investors have a better idea about the company’s fundamental metrics. Potential investors should put the shares on their radar with a view to buy dips.
Crypto Traders and GREE Stock
Greenidge owns and operates a natural-gas-powered electricity generation facility as well as integrated Bitcoin (CCC:BTC-USD) mining operations. It is the only publicly-listed bitcoin miner that owns a natural gas power plant, which is in Dresden, N.Y. The company is carbon neutral.
So far in 2021, Bitcoin mining has come under fire as it is not environmentally friendly. Elon Musk, CEO of Tesla (NASDAQ:TSLA), has been one of the most prominent crypto enthusiasts to encourage a greener approach to digital currency mining.
Therefore, the vertical integration gives a significant competitive advantage to Greenidge in the crypto space. And that sets GREE stock apart from two other widely followed names: Riot Blockchain (NASDAQ:RIOT) and Marathon Digital (NASDAQ:MARA).
The group has merged with SPRT primarily to gain access to the public markets quicker than a traditional initial public offering (IPO) or via a reverse-merger with a special purpose acquisition company (SPAC).
Many analysts have regarded it as an unorthodox deal given the two companies it involves, as they have entirely separate offerings, and there are no apparent synergies between the two.
For GREE stock, the future lies in the growth of digital assets, especially that of profitable Bitcoin mining. The group plans “to achieve at least 500 MW of mining capacity by 2025.”
CEO Jeff Kirt believes the company, “is uniquely positioned to capitalize on future growth opportunities.”
Future quarters will show whether Greeridge can produce bitcoin at lower costs and achieve higher profit margins. If it can become profitable, then the Street will reward early shareholders of GREE stock.
The Bottom Line on Greeridge Stock
Many market participants have high hopes for the evolving crypto space. As a result, mining stocks tend to follow Bitcoin closely.
However, investors have yet to see how GREE stock will perform in a post-merger world. Therefore, they should ideally wait for a significant pullback before adding the stock to their portfolio.
Those readers who are interested in crypto assets and financial technology (fintech) stocks could also consider buying an exchange-traded fund (ETF) that provides access to growth in digital assets and blockchain technology.
Examples include 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 did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Tezcan Gecgil, Ph.D., has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all three levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.
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