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This week the sponsor of the Bitcoin Investment Trust, Grayscale Investments has announced the launch of a 91-for-1 stock split of the Trust’s issued and outstanding shares. According to Grayscale, the division will take place on January 26 and shareholders will receive 90 shares for each their original shares held.
The Bitcoin Trust Is Creating a 91-1 Stock Split
Grayscale Investments, Bitcoin Investment Trust (OTCQX: GBTC) is a popular investment fund based on the price of bitcoins held in reserves. Most investment trusts own a fixed amount of the asset and investors purchase shares of the Net Asset Value (NAV). One GBTC share is worth around 1/10th of BTC and users also pay portfolio maintenance fees. Investors like GBTC because it is considered one of the only stock tied to real bitcoins that are offered on a public stock market. Because BTC values have rallied for well over a year GBTC prices have followed suit making the price per share a bit expensive for some. Unlike purchasing bitcoins in fractions, investors have to buy an entire share to get in on GBTC investing. The increased price has made it harder for ordinary retail investors to buy shares so Grayscale has decided to create a stock split.
From $ 1,800 Shares to $ 18 Per GBTC
Basically, a stock split or divide increased the number of shares allocated to the investment vehicle. For instance right now Grayscale holds 1,916,600 shares of GBTC and one share is worth 0.09242821 BTC. If a user purchases ten shares, then they have the equivalent of 1 BTC and Grayscale holds a total of roughly 170,000 BTC. With the launch of a 91-for-1 stock split every share that’s worth .092 BTC will drop to 0.00101 BTC. After the split, there will be 174,410,600 GBTC shares in circulation. Grayscale believes the move will make GBTC shares more affordable and it will entice retail investors. Currently, one GBTC share is roughly around $ 1,767 USD, and after the split, it will be worth about $ 17.60 respectively.
“It is the only product (of its kind) available to investors for purchase at net asset value,” explains the Grayscale director Michael Sonnenshein in a recent video interview.
The Possibility of Even More Shares and Automatic Issuance
Grayscale also reveals that the stock split could result in more shares than estimated on January 26.
“After the close of business on the record date, the Trust will announce the total number of shares that will be issued and outstanding immediately after effectiveness of the stock split on January 26, 2018, which will give effect to any such new shares created after the date of this press release and up through the record date,” Grayscale Investments details.
Shareholders are not required to take any action to receive the shares in connection with the stock split and they will not be required to surrender or exchange their shares in the Trust — The transfer agent will automatically issue the new shares in the stock split.
Stock Splits Can Affect a Stocks Overall Value Either Negatively Or In a Positive Way
Stock splits happen all the time in the financial world, but it’s interesting to see the method applied to an investment fund based on actual bitcoins held in storage. There are two scenarios that could happen when more GBTC shares become available as far as the stock’s price. One, the market could get over diluted, and the price drops in value at some point after the split; or, the split shares could make the overall asset holdings increase in value while also creating more accessibility to ‘average Joe’ investors. Grayscale is hoping for the latter outcome.
What do you think about Grayscale splitting GBTC? Let us know your thoughts in the comments below.
Images via Pixabay, Grayscale, and Google Finance.
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The sexual misconduct story that Michael Douglas pre-emptively denied last week is now public. Journalist and author Susan Braudy tells the Hollywood Reporter that the actor subjected her to incessant sexual harassment when she ran the New York office of his Stonebridge Productions company in the late 1980s, including so…
It’s hard to envision just how close to death Ric Flair was in 2017 … until you see the photo of the WWE legend while he was recovering in the hospital. Nature Boy just posted a pic taken right around the time he woke up from his medically…
Declines by Boeing, General Electric and other big industrial companies weighed on U.S. stocks Thursday, pulling the major U.S. indexes down from the record highs they set the day before.
Energy stocks contributed to the modest decline following a slide in crude oil prices. Technology companies…
Facebook shares were down more than 4% early Friday to $ 180.10 after the social network announced it was making major changes to its signature News Feed.
Facebook said it would begin prioritizing posts from users’ friends and families that spark the most interaction over posts from brands and publishers.
Travis Kalanick plans to make the sale as part of a broader investment deal led by SoftBank Group. Mr. Kalanick, who holds about 10% of Uber, had previously indicated he wouldn’t sell shares into the offer.
WSJ.com: What’s News Asia
Stocks opened slightly higher on Wall Street on Wednesday as technology companies rose again.
The early gains came the day after the Nasdaq composite closed above the 7,000-point milestone for the first time.
Chipmaker Nvidia rose 3.4%, and business software maker Oracle increased 2.5% in the early…
A small U.S. beverage company’s share price has increased by more than 400% in a single day after rebranding to include the word ‘blockchain’ in its name. The company, formerly known as Long Island Iced Tea Corp, is now called Long Blockchain Corporation. A Hong Kong-based beverage company formerly-named Skypeople Fruit Juice has also seen a dramatic spike in share price since rebranding to Future Fintech Group earlier this year.
Long Blockchain Corporation’s Share Price Increased by 432% in a Single Day After Rebranding
The company has stated that although it will continue to produce iced tea-based beverages, it is “shifting its primary corporate focus towards the exploration of and investment in opportunities that leverage the benefits of blockchain technology.”
The company’s chief executive officer, Philip Thomas, stated “We view advances in blockchain technology as a once-in-a-generation opportunity, and have made the decision to pivot our business strategy in order to pursue opportunities in this evolving industry. We will, in the coming weeks and months, be taking a series of steps related to our efforts to assemble a world-class team of industry professionals to help us realize this vision. We are pursuing our new direction in a thoughtful and deliberate manner.”
Long Blockchain Corporation Has Not yet Partnered With nor Invested in Any Entities in the Cryptocurrency or Distributed Ledger Technology Industries
Despite the confident rhetoric, there is little evidence indicating that Long Blockchain Corporation’s “pivot” will comprise anything more than a change in name. Although the firm states it is seeking “potential partnerships, investments or acquisitions” in the blockchain industry, the company’s press release states that “The discussions are only in the preliminary stages,” and “There is no assurance that a definitive agreement with these, or any other entity, will be entered into or ultimately consummated.”
Skypeople Fruit Juice Share Price Doubles After Renaming to Future Fintech
Earlier this week, CNBC reported the Hong Kong-based beverage company’s shares had doubled in value amid a frenzy of Twitter-based speculation that the firm’s June rebrand was intended to reflect a newfound focus on cryptocurrency on blockchain technology. Although the company attributed its name change to a desire to focus on financial technology, CNBC reported that “there is no mention of ‘blockchain,’ ‘bitcoin’ or anything crypto-related in the release or the company’s November presentation to investors.”
Future Fintech’s website states that the company’s mission is to “develop a highly integrated agricultural products and finance company that promotes healthy living through […] high-quality nutritious products.”
Do you think that Long Blockchain Corporation will make good on its claims and invest in the distributed ledger technology space? Or will the company’s focus remain on producing iced tea? Share your thoughts in the comments section below!
Images courtesy of Shutterstock
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News that a 22-year-old woman was mauled to death by her two pit bulls in Virginia Thursday night was met with sadness—and plenty of doubt . Amid a sea of cries that the dogs would not have harmed Bethany Lynn Stephens, and perhaps were indeed trying to protect her from…
In a filing with the Securities and Exchange Commission (SEC), Morgan Stanley has revealed it owns a large passive stake in online retailer Overstock.com. News of the company being gobbled up by the legacy bank caused the bitcoin-friendly outfit’s stock price to rise sharply for the third time this quarter.
Overstock Shares Jump 22% on Morgan Stanley News
And so it begins. Legacy bank Morgan Stanley (NYSE: MS), which celebrated its 82nd year of business this Fall, purchased 11.4 percent of Overstock.com (NASDAQ: OSTK), an online retailer around for a quarter of MS’s tenure.
Back in 2014 Overstock became the first major retailer to accept bitcoin.
In accordance with SEC regulations, Morgan Stanley filed a 13G, an eight-page document detailing the purchase. Of interest in the filing were the facts MS made the purchase November 30, and that it owned close to 3 million shares, a little more than 11 percent of the company.
Shares of Overstock have grown roughly 200 percent this year alone, and mostly on the company’s embracing bitcoin and blockchain technology applications.
News released December 11 of MS’s purchase caused yet another rise in Overstock’s price, up some 20 percent in one trading day.
As of this writing, neither company has spoken with the press nor made any public statements.
From Retailer to Crypto Ambassador
It has been a good quarter for the online retailer. Back in October, news.Bitcoin.com reported an 11 percent jump in price, and in November its stock price did three times that in a single day after analysts praised its embrace of bitcoin and blockchain.
Certainly news of bitcoin being courted by mainstream futures and derivatives markets, Cboe and CME this month, haven’t hurt Overstock’s pivot away from e-commerce and more toward tech. It’s also set to launch an initial coin offering in roughly a week as a distributed ledger platform for capital markets.
As a retailer, Overstock’s performance, ironically, has left a lot to be desired. According to The Motley Fool, “The company posted a net loss of $ 11 million over the trailing-12-month period, and has lost money on an operating basis in four of the past 10 years. Its operating margins hover around 1% in its best years.”
It appears investors see it less as an online storefront and more as a potential cryptocurrency/blockchain company of some kind. Also, Overstock is known to hold back its bitcoin in order to invest in cryptocurrency related projects, though it hasn’t said exactly how much it has on hand.
What are your thoughts on Overstock.com? Let us know in the comments section below.
Images courtesy of Pixabay, Mises Institute.
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