Trade Alert: Betting against this so-called Blockchain company

Okay, I have a Bitcoin Blockchain Cryptocurrency trade that I’m putting on.

Riot Blockchain was a biotech penny stock with a tiny market cap that doesn’t do much business at all. For example, just last year the company was changing its name from “Venaxis” to “Bioptix.” Now apparently they are a blockchain company? The CEO of Riot Blockchain  is the same guy who was the CEO when this company was Venaxis and gave this interview:

“We are actively enrolling patients into the pivotal study, which we expect to support regulatory submission for potential FDA clearance of the APPY1 Test System. The first hospital sites began enrolling patients earlier this year and enrollment has continued to ramp nicely as we continue to bring more of our participating sites on line. The study will enroll 2,000 evaluable patients in total and we expect to complete enrollment and report top-line data by the end of the year. We plan to submit our 510(k) package to the FDA as soon as possible, if the data are positive.

In terms of our expectations, we would feel very confident if we were able to achieve results similar to our previous 500-patient study, which was completed in 2011. This was the first clinical study performed using our improved multi-biomarker test format, and the APPY1 Test demonstrated negative predictive value of 97%, sensitivity of 97% and specificity of 43%. Based on physician feedback, these results, particularly the high negative predictive value, are very strong in terms of what they are looking for in a test like APPY1.”

Here’s what he says these days as CEO of Riot Blockchain:

“At Riot Blockchain, our team has the insight and network to effectively grow and develop blockchain assets,” said Michael Beeghley, Chief Executive Officer of Riot Blockchain. “With new applications being developed for blockchain every day, this is a rapidly growing and evolving market. We are excited to have partnered with and led an investment in Coinsquare, a company we believe is well positioned to capitalize on the opportunity in this sector.”

And that press release announcing their name and business change actually says this:

“Riot Blockchain Inc. (formerly Bioptix, Inc.) leverages its expertise and network to build and support blockchain technology companies. It is establishing an Advisory Board with technical experience intending to become a leading authority and supporter of blockchain and provides investment exposure to the rapidly growing blockchain ecosystem. For more information, visit http://www.riotblockchain.com/.

The company continues to maintain its existing Bioptix business line and its royalty license stemming from an Exclusive License Agreement with Ceva Santé Animale S.A. (“Licensee”), providing an exclusive worldwide royalty-bearing license, until December 31, 2028, to develop, seek regulatory approval for and offer to sell, market, distribute, import and export luteinizing hormone (“LH”) and/or follicle-stimulating hormone (“FSH”) products for cattle, equine and swine for the assistance and facilitation of reproduction.  “

The CFO is the same guy too and hasn’t changed even as the company’s names have.

So look, go back and re-read any or all of those articles I wrote warning people about this exact same scummy insider-selling, changing your name and stock symbol reverse merger concepts and it’s the same thing here. You think these biotech guys that didn’t deliver products in the last seven years are actually trying to make money on blockchain now?

I feel very comfortable telling you that this stock will be back below $4 per share no matter what Bitcoin or the cryptocurrency world is doing two years from now. You can’t borrow the stock so you can’t short it. But there are some puts.

The puts are not very liquid so don’t rush into this and don’t think that we can precisely nail the top in stock like this during a mania. And the stock has already started falling from its 42% highest point that it was up earlier today.

But here’s the trade. I’ll be bidding on some puts that expire out in March 2018 and/or in June 2018 with strike prices ranging from $15 to $25. But I’ll only bid on these on days like today and I’ll put in bids just below some of the existing bids. If the stock rallies another 10-15% during today’s maniacal trading, some of these bids will get hit. I’ll look to do the same thing on this stock in coming days and weeks if it rallies much higher again like this.

If you don’t understand options then don’t feel like you have to make this or any other option trade you hear or read about. Do what you’re comfortable doing and what you understand. Anyway, stay away from penny stocks and microcaps, especially those that go around changing their name all the time chasing the latest greatest mania.

Be careful out there, there’s a lot of scams, a lot of manias and a lot of excesses in many different markets right now.

PS. Jake Fistes and I are putting the finishing touches on a book all about Blockchain, Bitcoin, Cryptocurrencies, etc. Should be done later this week.