Shares of the small merchant processor Net Element Inc. surged more than 200% Wednesday morning, apparently for no other reason than the company announced it was creating a business unit to pursue opportunities in the nascent blockchain industry.
At about 11:30 a.m. Eastern time, Miami-based Net Element’s stock was priced at $17.25 per share in heavy trading, up 231% from Tuesday’s $5.21 close, according to Yahoo! Finance. Net Element’s shares trade on the Nasdaq Capital Market for small-cap companies.
Net Element issued a press release before the markets opened announcing the blockchain unit. Its stock then took off in pre-market trading, according to reports on the financial wires, and opened at $17.80. As of Tuesday, Net Element’s shares had slipped about 30% during 2017.
Net Element is working with Bunker Capital, a San Francisco-based firm that funds cryptocurrency startups and prepares initial coin offerings, which are forms of crowdfunding for new blockchain enterprises.
“We believe that we’re at the dawn of a new evolution where additional digital payment methods are being introduced,” Net Element chief executive Oleg Firer said in the release.
The new business unit, according to the release, “is expected to become a decentralized crypto-based ecosystem that will act as a framework for an unlimited number of value-added services … that can connect merchants and consumers directly utilizing blockchain technology while increasing the economic efficiency of all transactions being made within the ecosystem.”
Net Element also said it will invest in “unique projects which decentralize and disrupt the payment-processing industry by combining blockchain technology and real-world applications,” according to the release.
A Net Element spokesperson did not respond to a Digital Transactions News email requesting comment.
Meanwhile, prices are softening for the most famous digital currency, Bitcoin, which has seen its price jump from about $1,000 at the start of the year to just over $19,000 on Dec. 17. Late this morning, a Bitcoin was priced at just under $16,400, according to Coindesk—a 14% decline in three days.