GREE action might not work well in a post-merger world

Bitcoin Mining and Power Generation Group Generation Greenidge (NASDAQ:GREEN) share is the new name and symbol of the company resulting from the merger of Support.com and Green coast.

InvestorPlace.com readers will know that Support.com has been around for over two decades and has a history of volatile income, low profitability, and losses. Until September 15, it traded under the symbol “SPRT”.

Support.com has provided customer and technical support solutions for home workers. It also offers outsourced customer support and cloud-based technology platforms to companies across multiple industries including media and communications, healthcare, retail, and technology.

Earlier this year, Support.com took an interest in the crypto space, announcing a merger with the private crypto mining company Generation Greenidge. The announcement caught the attention of many crypto bulls as well as even stock traders.

SPRT shares have traded between $ 1 and $ 2 over the past five years. Then Support.com’s weak outlook caught Reddit’s attention. r / WallStreetBets forum and triggered a major short squeeze, resulting in significant gains for investors. August was a wild race for stocks, which peaked at $ 36 before dropping to $ 11.80 before the merger.

But now this is all part of Wall Street history as the company has, in fact, become a subsidiary of GREE.

Each SPRT share gave shareholders the right to 0.115 GREE share. In other words, we cannot expect Support.com’s activities to contribute much to the new entity.

Therefore, today’s article takes a look at what to expect from the GREE stock in the coming weeks.

The stock is trading around $ 38 today. I expect it to be volatile until investors have a better idea of ​​the fundamentals of the business. Prospective investors should put stocks on their radar in order to buy downs.

Crypto traders and GREE stocks

Greenidge owns and operates a natural gas-fired power generation facility as well as integrated facilities Bitcoin (CCC:BTC-USD) mining. It is the only publicly traded bitcoin miner that owns a natural gas-fired power plant, which is located in Dresden, NY. The company is carbon neutral.

So far in 2021, Bitcoin mining has been criticized for not being environmentally friendly. Elon Musk, CEO of You’re here (NASDAQ:TSLA), has been one of the most prominent crypto enthusiasts to encourage a greener approach to digital currency mining.

Therefore, vertical integration gives Greenidge a significant competitive advantage in the crypto space. And that sets the GREE action apart from two other widely followed names: Riot Block chain (NASDAQ:RIOT) and Digital marathon (NASDAQ:MARA).

The group merged with SPRT primarily to access public markets faster than a traditional initial public offering (IPO) or via a reverse merger with a special purpose acquisition company (SPAC).

Many analysts saw it as an unorthodox deal given the two companies it involves, as they have entirely separate offerings, and there is no apparent synergy between the two.

For the GREE share, the future lies in the growth of digital assets, especially profitable Bitcoin mining. The group plans to “reach at least 500 MW of mining capacity by 2025″.

CEO Jeff Kirt believes the company “is ideally positioned to capitalize on future growth opportunities.”

The next few quarters will show whether Greeridge can produce bitcoin more cheaply and achieve higher profit margins. If it can become profitable, then the streets will reward the first shareholders of GREE shares.

The result on Greeridge Stock

Many market players have high hopes for the evolution of the 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.

Readers interested in crypto assets and financial technology (fintech) stocks might also consider purchasing an exchange-traded fund (ETF) that provides access to the growth of digital assets and blockchain technology.

Examples include the ETF Innovation Fintech ARK (NYSEARCA:ARKF), the Capital Link NextGen Protocol ETF (NYSEARCA:KOIN), First Trust Indxx ETFs Innovative Transactions and Processes (NASDAQ:LEGR), and the Siren Nasdaq NexGen Economics ETF (NASDAQ:BLCN).

At the date of publication, Tezcan Gecgil had (directly or indirectly) no position in the securities mentioned in this article.

Tezcan Gecgil, Ph.D., has worked in investment management for over two decades in the US and UK. In addition to having completed graduate studies in the field, she has also passed all three levels of the Chartered Market Technician (CMT) exam. His passion is for options trading based on the technical analysis of fundamentally sound companies. She especially enjoys setting up weekly covered calls to generate income.