BTCS Inc (OTCMKTS:BTCS)
Shares of BTCS Inc (OTCMKTS:BTCS) tumbled 8.13% after the company announced plans to merge with Australian blockchain company, Blockchain Global Limited. The two companies have signed a non-binding Letter of Intent that paves way for the protracted merger, subject to a number of conditions.
The merger push appears to have rattled investors as BTCS Inc (OTCMKTS:BTCS) tumbled from this year’s highs of $0.42 a share to current to $0.23 a share. The stock faces immediate support at the $0.21 level below which it could tumble to lows of $0.11, depending on the strength of the sell-off wave. Monday’s sell-off is threatening to reverse a bull run that begun last month helping push the stock from lows of $0.05 a share.
BTCS Inc (OTCMKTS:BTCS) is a blockchain company that operates a beta e-commerce marketplace that accepts digital currencies. The site offers secure ways of storing Bitcoin currencies in addition to marketing 250,000 products. In a bid to pursue growth around blockchain technology, the company has developed a secure digital currency solution dubbed BTCS wallet.
BTCS-Blockchain Global Limited Merger
Blockchain Global Limited which BTCS Inc. (OTCMKTS:BTCS) plans to merge after generating revenues of $4.4 million last year, representing a 300% year over year increase. The company has approximately $3.5 million in assets made up of cash and Bitcoin. It operates under four distinct business lines as an institutional exchange platform, transaction verification services, a blockchain startup accelerator, and a blockchain technology consultancy.
“In addition to our work with innovative companies through the Melbourne Blockchain Center, we’ve also positioned ourselves to be a leading consultant in the space, servicing companies that recognize the importance of incorporating blockchain technology into their organizational strategies,” said Sam Lee BCG CEO.
The Letter of intent signed is subject to the approval of BCG’S shareholders in addition to BTCS Inc. (OTCMKTS:BTCS)’s board of directors approving the transaction. Under the terms of the agreement, BCG shareholders are to receive a combination of common stock as well as convertible preferred stock and warrants equaling 75% of the combined company.
The Letter of Intent, if approved, will also result in current executive officers receiving 12% of the fully diluted equity in the form of common stock. Insiders of the combined company will also have to agree to a one year lock up on any equity issued in connection with the merger transaction.
I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.
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About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.