Shares of Grindr, an LGBTQ social media platform, rose more than 200% to around $40 on Nov. 18, 2022, following the company’s merger with Tiga Acquisition Group in a deal valued at $2.1 billion.
Grindr’s share price then closed the trading day on November 17, 2022 at $11.63 and opened the trading day on November 18, 2022 at $17.00, up 46.2% overnight.
The stock’s price surge was due in part to the low volume of shares outstanding (500,000) and the interest generated by the company. The stock has since fallen slightly to $36.50.
Other stocks to post strong gains on Nov. 18, 2022 include PaxMedica, a pharmaceutical company that gained 36.8% in intraday trading to trade its shares at $2.135. There’s also YTRA, the travel specialist, which reported a 33% increase in intraday transactions, rising to $2.82.
The surge in Grindr stock is reminiscent of early memecoin rallies like Dogecoin, whose price increases of 10,000% or more were not uncommon in 2021.
Between January 27, 2021 and May 8, 2021, the DOGE crypto thus gained more than 10,000%, going from $0.002 at the end of January 2022 to $0.68 at the beginning of May.
Dogecoin’s surge came as speculative investors flocked to cryptocurrencies during and after the Covid-19 pandemic. International lockdowns have led to record trading volumes, thanks to the efficient trading interfaces of companies like Robinhood Markets. Bloomberg reported about 149% growth in the number of taxpayers who invested in cryptocurrencies in 2020 compared to 2019.
Dogecoin preceded another memecoin, Shiba Inu (SHIB), which also gained around 11,000% between the end of September 2021 and the end of October 2021.
Meme coins, or crypto memes, differ from other major cryptocurrencies in the industry because they offer little value or utility beyond speculation.
The DOGE course and Elon Musk’s tweets
Sentiment from big-name influencers often leads to price hikes for coins as well.
Among these is the case of Dogecoin, whose price has more or less followed the bullish statements of the new owner of Twitter and CEO of Tesla, Elon Musk, whose tweets have caused the asset to rise up to 20% in the space of a day .
On the flip side, the same negative sentiment from a celebrity can drive prices down, as seen when Binance CEO Changpeng Zhao tweeted that the exchange will sell its holdings in FTX cryptocurrency FTT, which was then worth 540 million dollars.
The price of the FTT then dropped 76% on November 8, 2022, about two days after the tweet. Indeed, Changpeng Zhao’s message spooked investors and caused mass withdrawals of the token from the now bankrupt FTX exchange, causing many of the exchange’s customers to lose their holdings, as the FTT price is collapsed. FTX has since filed for bankruptcy.
Sometimes cryptocurrencies that increase in value within days, like last year’s ill-fated SQUID token, are actually linked to fraud. Indeed, the SQUID token went from $0.01 to $3,000 in six days and then plummeted as the project’s developers disappeared with around $3.3 million in cash.
A difficult year for cryptocurrencies
It’s been a tough year for cryptocurrency stocks. Shares of MicroStrategy, the largest bitcoin holding company, which has over 130,000 BTC on its balance sheet, are indeed down nearly 70% year-to-date to a low of $170.12. Meanwhile, shares of Coinbase, the largest cryptocurrency exchange in the United States, are down about 80% year-to-date to trade at $45.44.
Coinbase reported a loss of $540 million for the third quarter of 2022, its third consecutive quarter of losses as the company struggles with plummeting trade revenue.
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