The bitcoin bubble appears to be popping, with the cryptocurrency down almost 28% at last check on CoinDesk -- to trade at its lowest level since Dec. 6, and on track for its fourth straight drop. The sharp selloff is weighing on a number of bitcoin-exposed stocks in early trading, including finance firm Longfin Corp (NASDAQ:LFIN), beverage maker Long Island Iced Tea Corp (NASDAQ:LTEA), and blockchain investor Riot Blockchain Inc (NASDAQ:RIOT). Here's a closer look at shares of LFIN, LTEA, and RIOT out of the gate.
Longfin shares are down 17.2% at $38.00 -- landing on the short-sale restricted list (SSR) again -- after losing 33% yesterday. And while the stock -- which went public on Dec. 13 -- was up 818.2% from its initial public offering (IPO) price of $5 heading into today's trading, it remains well below its Dec. 18 record high of $142.82. Boosting the equity was Longfin's Dec. 15 purchase of blockchain technology firm Ziddu.com, which sent LFIN more than 308% higher on the day.
Just yesterday, Long Island Iced Tea said it was shifting its focus to blockchain technology, and changing its name to Long Blockchain. The news sent LTEA stock up 183.2% on the day, but today, the shares are down 19.3% to trade at $5.58. Ahead of Thursday's cryptocurrency announcement, Long Island Iced Tea stock had been charting a path steadily lower amid increased pressure from shorts.
Specifically, the shares were down 63% from their mid-June highs, while short interest surged 60.5% in the two most recent reporting periods. And while a short squeeze likely helped propel LTEA higher yesterday, bearish bettors will be restricted from making any moves until after the Christmas holiday, considering the stock is currently on the SSR list.
Riot Blockchain has plunged 13.9% to trade at $23.80 -- good news for Citron Research. The shares began surging in early November after the former biotech said it was investing in bitcoin mining machines, topping out at a five-year high of $46.20 on Tuesday. Nevertheless, the security is on track for its first weekly loss since Dec. 1.
Options traders have been clamoring to get a piece of RIOT, with total open interest of 113,814 contracts at a 52-week peak. The January 2018 22.50-strike call is home to peak open interest of 4,817 contracts, and it looks like most of the activity here has been of the buy-to-open kind.