Remember “just add blockchain?”
In that post, published about a month ago, we detailed the extent to which giving your stock a double, or triple-digit boost is now as easy as acquiring a company with some connection to the cryptoverse and then simply rebranding yourself as a blockchain adopter.
That was a followup piece to our earlier posts on Riot Blockchain, a company which, just five years ago, was licensing “intellectual property relating to recombinant single chain reproductive hormone technology for use in non-human mammals,” and which, just 21 months ago, sold its headquarters only to rent space in the back and try to build another business based on “Enhanced Surface Plasmon Resonance technology,” and which, in the final act, decided to rename itself “Riot Blockchain” and go into the cryptocurrency business.
Last week, we followed up on all of that with a piece called “#It’sNotABubble: Lenders Are Now Accepting Bitcoin As Collateral For Cash Loans,” in which we drew your attention to several startups that are now lending against Bitcoin collateral. Then, in yet another companion post, we introduced you to Metropolitan Bank Holding Corp, a hot bank IPO that seems to owe some of its recent gains to a Bitcoin debit card offering.
Well if you thought all of that was absurd, it turns out you hadn’t seen anything yet. Enter LongFin Corp., which went public last week. Since its IPO, the shares are up 2,400%:
As you can see, things really accelerated on Friday, which is the day the company made the following announcement:
Longfin Corp. (NASDAQ:LFIN), a leading global FinTech company, announces the acquisition of Ziddu.com, a Blockchain-empowered solutions provider that offers Microfinance Lending against Collateralized Warehouse Receipts in the form of Ziddu Coins.
Obviously, that is all kinds of hilarious, but as funny as the first sentence of the press release most assuredly is, the next sentence – which finds LongFin attempting to explain what exactly a “Ziddu Coin” does – is even more hilarious. To wit:
Ziddu Coin is a smart contract that enables SME’s, processors, manufacturers, importers and exporters using cryptocurrencies across continents. Ziddu Coins are loosely pegged to Ethereum and Bitcoin. The importers/exporters convert offered Ziddu coins into Ethereum or Bitcoin and use the proceeds for their working capital needs. At the end of the contract, importers/exporters will realize their proceeds and pay back their funds through cryptocurrencies only. Depending upon the risk profile of the counterparty, the interest will vary from 12% to 48%.
So importers/exporters obtain financing against their warehouse receipts in the form of something called a “Ziddu Coin” which is itself “loosely” pegged to Ethereum and Bitcoin. One wonders what Art Vandelay would think:
Here’s a screengrab from Ziddu.com:
I’m not going to even pretend like I understand this “business” but here’s some further color from the 8K filed in conjunction with this acquisition:
On December 11, 2017, Longfin Corp., (the “Company”), a Delaware corporation (“LFIN”), entered into a definitive asset purchase agreement (the “Agreement”) with its affiliate Meridian Enterprises Pte.Ltd., a Singapore corporation (“Meridian”) and with related affiliates collectively represented by the Galaxy Media Ltd., Hong Kong, for the purpose of purchasing Meridian’s website, www. Ziddu.com, in exchange for 2.5 million restricted Class A common shares of the Company.
The website www.Ziddu.com presents a blockchain solution for micro lending and warehouse financing. It offers Trade and Micro finance in the form of warehouse Coins to the small and medium imports/exports against collateralization of traders warehouse receipts. Ziddu Warehouse Coin is a smart contract that enables Importers and Exporters to use their Ziddu coins that are loosely pegged to Ethereum Crypto Currency.
So now, in addition to being “a global FinTech company powered by Artificial Intelligence and Machine Learning that delivers foreign exchange and finance solutions to importers/exporters”, Longfin will be able to “provide cryptocurrency-based financial service for importers/exporters with Ziddu coins from its blockchain-empowered subsidiary Ziddu.com.”
You can’t blame the guy in the picture below (taken on the day of LongFin’s IPO) for looking spaced out:
Here’s the “evolution” of the company as detailed on their website:
- LongFin Post SEC qualification acquired 100% of Stampede Tradex Pte Ltd, a Singapore based FinTech Company backed by Mr. Meenavalli Venkat
- LongFin owns Stampede’s all Key Assets – The Low Latency Platform, Quant Team and Proprietary Algorithms
- Our Ultra Low-latency and High Frequency Trading Platform is connected to all major Exchanges, OTC Markets and Banks
- We deal with leading global companies like Cofco, Bunge, Concordia, AWIN Resources etc.,
- LongFin is rolling out globally
Yes, “LongFin is rolling out globally.”
If you can make any sense whatsoever of any of that, please do let us know.
Because after about an hour of sorting through the public filings on Edgar, we are still wholly unsure what it means to be a global FinTech company powered by Artificial Intelligence that provides microlending services to importers and exporters in the form of Ethereum-linked Ziddu Coins collateralized by warehouse receipts.