(Bloomberg Businessweek) -- From late 2017 to early 2018, dozens of small- and mid-cap companies tried to use the hype surrounding Bitcoin to goose their stock market . Fruit-juice enterprises touted ties to blockchain while tobacco businesses pivoted to cryptocurrency mining. “You may get an initial pop in the stock, but generally you’re going to see these things lag behind,” says Steven DeSanctis, a strategist at Jefferies LLC. “The market is going to figure out whether or not it has the appropriate growth profile.”
A hypothetical portfolio of 45 companies, equally weighted, that from Aug. 30, 2017, to Jan. 18 incorporated cryptocurrency or the blockchain into their businesses would have gained 800 percent since the start of that period, outpacing the S&P 500 and Bitcoin, the largest cryptocurrency by market . Below are five of those companies that saw a pop in stock price soon after their switch:
Using buzzwords to boost returns is not a novel strategy. In the 19th century, railroad companies began using the term “air line” even though they didn’t operate airplanes. During the tech bubble, scores of companies saw their s soar then plummet after adding “.com” to their names. The tactic became so tired that some companies rallied after dropping the suffix.
—With Tom Lagerman
©2018 Bloomberg L.P.
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