A fascinating development in what’s dubbed the “meme stock” world is unfolding and blockchain technology is poised to play a big role.
A year ago, the stock prices of two companies — GameStop and AMC — baffled the investment world when they skyrocketed in value despite underwhelming financial statements. GameStop went from around $4 per share in the summer of 2020 to a peak of $483 in January while AMC, the movie theatre company that was hard hit because of public-health restrictions during the pandemic, was at a 52-week low of $1.91 in December and peaked a few weeks later at $72.62.
The dramatic price increases were credited to a new influence in the investment world: the self-proclaimed apes of Reddit. Retail investors allied together to rebel against what they consider to be the dark forces of the financial world — hedge funds that would short sell companies like GameStop and AMC, driving their valuations into the ground.
The Reddit apes turned the tables, coalescing to hoard as many shares as possible, refusing to sell, pressuring the hedge funds to buy shares at ever-increasing prices in order to fulfill their legal obligation to return the borrowed shares to a bank or brokerage. One billion-dollar hedge fund nearly went bankrupt because of the Redditors’ tactics, a victory that further emboldened the apes.
After settling off their highs early in the year, the stock values of both GameStop and AMC are on the upturn again. This time, the goal is to ignite what the apes call MOASS, or the Mother of All Short Squeezes. They now control more than 80% of the shares of AMC and proclaim they can HODL til the hedge funds have to buy shares at $1,000 each — maybe even much more.
Their decentralized army has recently been joined by a powerhouse. Former hedge-fund owner Marc Cohodes announced early in November that he has purchased 60,000 AMC shares and is advocating for the company to begin offering NFTs. Cohodes sees utility value in the blockchain tokens that can connect with customers and also the technology’s ability to stop the illegal practice of “naked shorting” — which happens when a hedge fund sells shares it neither borrows nor owns into the market.
For utility and collector value, AMC could offer NFTs for movie tickets. The NFTs could contain trailers or behind-the-scenes footage or fan messages from actors. They could accrue in value should the film win an Oscar or become a cult hit, for example.
But to quicken MOASS, Reddit apes believe AMC could issue NFT dividends too, a move that would expose the naked short sellers.
Because the NFTs are traceable on chain, they will be tied to specific shares and once those shares get moved around so too does the rights to the dividend — thus AMC (and government regulators like the SEC) would be able to see who the “naked shorts” are and take action against them. Or, more likely, the company’s issuance of an NFT dividend would spark rapid liquidation among illegal short sellers, giving shareholders the MOASS of their dreams.
The BSV blockchain and its ecosystem of altruistic companies that want to level the economic playing field around the world is one that can achieve both goals. BSV is built using the original bitcoin protocol that was intended to stop financial crimes like naked short selling. The BSV community is also working with governments and authorities around the world to make sure its network is compliant with regulations as well as helping to define those regulations surrounding the new technology.
Here’s a potential series of BSV steps that can help companies that want to increase shareholder value and diversify their products for customers.
- FabriikX: Fabriik is founded by a former hedge-fund manager and is focused on using the BSV blockchain to “reimagine prosperity” by building a better future for finance, so everyone can thrive. FabriikX is the company’s new and unique NFT marketplace, showcasing one-of-a-kind, and limited edition NFTs from some of the best-known names in sports, art, music – uniquely curated by carefully selected experts from across the globe. FabriikX is one of the first NFT platforms to combine digital assets with tangible collectibles or experiences, so it would be the perfect fit for a theatre company and can deliver the scalability AMC would need as movie-goers head back to cinemas with the pandemic winding down.
- STAS Tokenization Technology: STAS is the proprietary tokenization technology of TAAL. Among its notable attributes is its ability to turn cryptocurrencies into fiat currency. AMC had recently announced it will accept bitcoin and the shiba inu altcoin as forms of payment in its theatres. STAS allows users to convert BSV or other cryptocurrencies into cash with a transaction fee of less than $0.01. That microtransaction cost allows low-income earners to participate with the new accepted payment forms.
- mintBlue: A Netherlands-based blockchain integration company built on BSV, mintBlue uses software development kits that can easily conjoin with existing operating systems. With mintBlue, companies allow their customers to take control of their own data and even to monetize it. Through a mintBlue SDK, AMC can enable users to choose to share their movie preferences to marketers and those marketers who might want to incentivize filmgoers to provide information can offer rewards or payments for doing so. With BSV, mintBlue swings the control of personal data to the consumer — a form of rebellion against giant monopolistic social media companies that aligns with the mindset of the Reddit retail investors.
- TAAL: With approximately 518 million outstanding shares, AMC will need reliable transaction processing to make sure the large number of NFT collectibles and NFT dividends it issues can be quickly posted on chain and into the accounts of its shareholders. TAAL is a global leader in blockchain infrastructure and holds the world record for mining the biggest data block. TAAL’s proven ability to handle the amount of transactions a company like AMC would send to the blockchain would no doubt please the apes.